Apply for Credit Card

Application Methods

You can apply for a credit card in several ways. The most common metohds include:

• Visit your local financial institution or bank
• Call your local financial institution or bank
• Respond to an offer by mail or telephone
• Visit a local retail store
• Use the internet to submit an application

The most time effective ways to apply for a credit card are either online or by phone, as both of these options are available from the comforts of your home and may provide an instant decision. They are also smart because they don’t require you to physically fill out an application, so there is no dangerous paper trail that could be a lure to potential identity thieves. When you apply online, the federal government requires the lender to protect your information by way of encryption security. Applying over the phone is similar, as once the information is entered into the lender’s computer system, it is also protected with staunch security and privacy measures.

Card Considerations

Consider many items when applying for a credit card. Let’s take a look at some important application factors:

• Corresponding annual percentage rate (APR)
  • Ranging from 0-30 percent, annual percentage rates explain how much interest is paid on outstanding balances.
  • Check to see if the APR is set or variable. Variable APRs can change from month to month based on a variety of reasons. Set APRs remain the same as long as the account is in good standing.
  • Review the default APR. On some cards, one late payment can bump you up to the default APR, which is much higher than the corresponding APR and can cost you hundreds, even thousands, of dollars per year depending on the card’s average daily balance.

• Fees
  • What fees are associated with the card? Are there annual fees, monthly fees, application fees or participation fees? Some credit cards have no fees associated with them while others can total a whopping $300 on your first bill alone.
  • How often does the lender offer credit line increases? Are there fees for this?
  • Is there a fee associated with additional cards for your spouse or child?

• What rewards will the card offer?
  • Airline miles
  • Cash back
  • Merchandise rewards

• Balance Transfer Promotions
  • What is the APR for transfers?
  • Will transferring your other credit card balances be beneficial?
  • How much can be transferred?

Apply for a Credit Card Information

Now that you have some parameters regarding what kind of card you are looking for, it’s time to collect the information needed to complete the application. While applying for credit, it is important to consider that some applications require more information than others, so it is wise to have the following information available:

• Name, current address and telephone number(s)
• Date of birth
• Past addresses for the last five years
• Driver license number and expiration date
• Social security number
• Current pay stubs for employment and income information
• A blank check (required by some lenders)

Note that the Patriot Act, enacted by the U.S. Federal Government in 2001, requires any person applying for credit to provide a valid social security number in the application. Not supplying this information in full, or supplying an incorrect number, results in an automatic application denial.

Planning Ahead

It is important to keep in mind that factors such as credit rating, balances on current credit accounts, bankruptcy status, pay history and the number of times you have applied for credit recently will affect the outcome of your application. In general, people with imperfect credit can expect to pay higher APRs and more related fees than those with good credit.

Applying for credit is a part of life, and carefully considering the right card can save you money and hassle. It is a smart idea to look for a credit card with an idea of what you want in mind. Make a list, including what APR you would like (or at least come close to), what fees you are willing to pay and what kind of rewards your ideal card will offer. It is also wise to compare cards before applying.