By Allan Halcrow | American Express Credit Intel Freelance Contributor
5 Min Read | December 22, 2022 in Cards
Careful planning will improve your odds of getting approved for a credit card, though there are no guarantees.
Research your options and be discriminating about which credit card(s) you apply for.
Take the process seriously. A credit card agreement is a legally-binding document – and opening a new account can affect your credit score.
You want to apply for a credit card. Do you assume the process will be like applying for a passport or a pet license – that is, approval is essentially guaranteed once you present the necessary information? Or do you assume that it will be like applying to a college or for a job – you focus on your qualifications, identify a good fit, and then present yourself in the best possible light?
Although you won’t have to write an essay or go to an interview to apply for a credit card, the process actually is more similar to applying for a job than for a passport. Yet approval rates suggest that many people either make wrong assumptions about the process or overestimate their qualifications. Federal Reserve numbers show that in June 2022, for example, about 17% of credit card applicants were turned down.1 Declined applications can knock points off your credit score if the card issuer uses a hard inquiry to determine your eligibility.
Although there are no guarantees, careful planning can boost the odds that your credit card application will be approved. Here are some suggestions for how to apply for a credit card.
In order to apply for a credit card, you typically need to:
There are some exceptions, however. You may be able to get a credit card at 18 if you have proof of regular income, or if you become an authorized user on someone else’s account. A Social Security number or ITIN aren’t always required, but are necessary prerequisites for some card issuers. And while being unemployed won’t necessarily bar you from getting a card, not having income could. The good news is that several types of non-wage income, like investment returns, child support, or Social Security payments might suffice.
Your credit score isn’t everything (your income is also a major factor), but it’s a baseline in many lending decisions, including credit card applications. Put simply, the higher your credit score, the greater the chance of approval.
Here are two common ways to find your credit score:
Literally hundreds of credit cards are on the market. Before applying for any of them, you’ll likely want to do some research and choose your target. For example, consider how you want to use the card – do you simply want to start building credit, or do you want to earn rewards? Options include:
You may want to consider a couple of other things as you narrow the field. Experts say that your odds of approval are generally higher if you apply for a card issued by a bank or credit union with which you already have a relationship.2 That may be particularly true if your account is in good standing.
Also, keep in mind that not all cards are equal – differences in interest charges, fees, and other factors can make a big difference. In other words, experts encourage you to read the fine print. To help make that easier, the Consumer Financial Protection Bureau (CFPB) maintains a database of credit card agreements from more than 600 credit card issuers.3
You can apply for most credit cards by filling out an application online, but you might also be able to complete a paper application and mail it to the card issuer. The advantage of applying online is that you usually get a decision in minutes, rather than weeks. Either way, be prepared to provide:
If you’re applying to transfer balances from existing cards, you will also need to have the specifics of those cards, such as creditor names, account numbers, and balances.
Applying for a credit card can be more like going for a job interview than getting a passport. But if you prepare carefully and have a sufficient income and credit score, you can increase your odds of approval. Don’t be discouraged if your application is declined. Another bank may approve you. And if there are negative factors working against you, you can work to correct them and apply again.
1 “SCE Credit Access Survey,” Federal Reserve of New York
2 “Why it may be easier to be approved for a credit card if you already have an account with the issuer,” CNBC
3 “Credit card agreements and surveys,” Consumer Financial Protection Bureau
The material made available for you on this website, Credit Intel, is for informational purposes only and is not intended to provide legal, tax or financial advice. If you have questions, please consult your own professional legal, tax and financial advisors.