If you are planning to get a new credit card, you are probably overwhelmed by the abundance of options out there. Each bank card you explore sounds promising and convincing, but there are some aspects to be considered before you apply for a card.
It all depends on your credit score
The first thing you need to do is check your credit score or credit report. When you find out your credit score, you can work your way from there. There are different criteria for each credit score that determines the kind of card you will be permitted to hold.
Normally, a credit score ranges from 300-900. If your credit score is above 700, it is considered good, if it is below 400, most likely it will be turned down by banks. If it is somewhere between the two, it can be improved in the future. The better your credit score is, the more you will be entrusted by any bank to hold one of their best credit cards orbeing approved for a loan ormortgage.
Just keep in mind that missing out on payments of bills, loans or credit cardswill have a negative effect on your credit score, making it more difficult for your requests to be approved by banks.
Now, nothing will guarantee that you will be approved to hold a specific card with good credit. More factors are investigated by your bank other than your credit score, such as your income, monthly payments, and other commitments.
Choose a card that works best for you
Once you have a clear idea of your credit score, start browsing through all options for credit cards based on your credit score. There are usually three types of credit cards: rewards credit cards, credit-building, and 0% APR.
The best way to take full advantage of your card is to use its offers. With every purchase you make, you will receive a discount, or you will be awardedwith points or miles that you can redeem. For example, if you’re a traveler, a credit card that rewards you with free miles is the best choice for you. Alternatively, if you want to be awarded withcash, you can sign up for a cash-back credit card.
This is for anyone who has poor or non-existent credit score. Building credit should be your top priority at this point before any rewarding cards or cash-back cards. This will benefit you in the long run by unlocking the best interest rates and increasing your odds of being approved for credit cards, mortgages, and loans. By meeting your repayments on time, and staying within the limit of your card, you will start to look reliable to companies, and this will consequently increase your credit score.
Intro 0% APR:
If you have a large purchase coming up, this card is a great option for you. Imagine having to pay no interest whatsoever on a huge purchase while paying off your debt each month. Keep in mind,this card usually has a limited period of time where purchases are interest-free, and it also requires good or excellent credit.
Time to apply
Once you have a clear idea of what type of card you want, start off by finding the card’s reviews,and read current cardholders’feedback on this card. This will help clarify the featuresyou will be enjoying in the future. Also, to be safe, make sure you know if this card requires an annual fee, as some cards require an annual fee that varies from one card to another. If that number sounds convenient to you and might be worth the value you’ll get in return, then you are ready to apply.