Getting a credit card can be a great opportunity for those looking to build their credit or benefit from rewards such as cash back or air miles. However, the application process can be nerve wracking.
Being approved for a credit card can be more difficult for those with limited or bad credit; however, it is not impossible. Regardless of your credit score, there are ways you can maximise your approval changes. Here are some steps to help you get approved for a credit card.
Focus on building your credit
The better your credit is, the higher your chances of being approved for a credit card. If you are planning to apply for a credit card, make sure to take some time in the months leading up to the application to start building good credit.
Here are just some of the ways you can start to build good credit:
Punctual payments
Credit card providers will look at your payment history to see how reliable you are at making your monthly payments. Automating your payments can mean that you’ll never miss a payment. If you have a good track record of paying off things like personal loans, utility bills and mobile phone bills, this will contribute to building up a healthy credit score.
Aim for a low credit utilisation rates
Experts recommend always keeping your credit utilisation rate (the amount of available credit that you are spending) lower than 30%.
Avoid applying for multiple lines of credit at once
In order to present yourself better to credit card providers, keep your credit applications to a minimum and try not to apply for multiple credit cards in a short period of time.
Keep track of your credit score
It is important to know what your credit score is by regularly checking your credit report. This is also a good way of checking that there are no errors.
Choose the right credit card for you
Once you have worked to improve your credit, you need to make sure you are selecting the right credit card. When thinking about the right credit card, consider the following factors:
What card will you qualify for?
Having a clear picture of your credit score can help you determine what cards you might be approved for and for which you might benefit from the best terms. You will hopefully be able to chose a credit card, depending on your credit profile.
If you have low credit or a limited credit history, you may find it difficult to get approved by many credit card companies. In this situation, it might be best to spend more time building up your credit before applying. You could also consider a secured credit card.
For those with good credit scores, you will have many more options to choose from. If you are likely to be approved for most credit cards, think about a card whose features or perks are most appropriate. For example, if you are a regular traveller, you may want to consider a credit card that offers air miles.
What will you be using your card for?
Knowing what you’ll be using your credit card for can also help you to make a more informed decision.
If you are taking a credit card out with the objective of building credit, make sure you look for one with low or no annual fee. You will also need to find a provider that accepts applications with a less-than-perfect credit score.
For those looking for a credit card to fund their everyday purchases, it could be beneficial to find a card with a rewards programme. Think about which perks would be best for you – from cashback to hotel points – and the type of spending you need to do to earn these points.
If you are taking out a credit card to fund a large purchase, such as a refrigerator or new washing machine, look for ones which boast an introductory 0% APR period. You can also look for ones which offer a welcome bonus. This means you can get money back on your purchase and avoid interest fees.