If you’re in the market for a new credit card, you can usually apply by providing some personal information — like your legal name and employment status — through an online application. But before you click on an “apply now” button, it’s important to know some common credit card terms and the types of credit cards that are available to you.
Because credit card companies typically perform a credit check to determine if you qualify for a card and ultimately set your interest rate, it’s a good idea to know your credit score prior to applying.
There are several ways to check your credit score without negatively impacting your credit. For example, you can request a free copy of your FICO Score every 30 days through Experian, or sign up for a free credit score through LendingTree Spring.
In addition, the Fair Credit Reporting Act (FCRA) requires each of the three major credit bureaus (Equifax, Experian and TransUnion) to provide you with a free copy of your credit report every 12 months through AnnualCreditReport.com. Note, these reports are currently available online weekly.
Your credit report is not the same as your credit score, but the information contained therein is what your credit score is based upon. A close look at your credit report can give you valuable insight as to why your credit score is the number that it is.
You’ll also receive a copy of your credit report any time that a company takes adverse action against you, such as rejecting you for a credit card or loan.
FICO Score and VantageScore are the two main credit-scoring models that lenders use when making credit decisions. Borrowers with higher scores are usually rewarded with better interest rates. Here’s a look at how the two compare and what a good credit score really is.
| Score | Creditworthiness |
|---|---|
| 800-850 | Exceptional |
| 740-799 | Very good |
| 670-739 | Good |
| 580-669 | Fair |
| 300-579 | Poor |
| Score | Creditworthiness |
|---|---|
| 781-850 | Excellent |
| 661-780 | Good |
| 601-660 | Fair |
| 500-600 | Poor |
| 300-499 | Very poor |
Becoming familiar with important credit card terms can help you determine if a credit card is a good fit for you before applying. Here are some common credit card terms and definitions you should know:
Annual fee
An annual fee is the cost some issuers charge each year to use their credit cards. Some credit cards have no annual fee, while others charge fees of $95 or more.
APR
An annual percentage rate (APR) is the annual interest you’ll be charged if you carry a balance on your card from month to month.
Balance transfer
A balance transfer is the process of moving debt from one or more credit cards to another credit card. Because these transactions often involve transferring high-interest debt to a card with a lower APR, they can typically help you pay down your debt faster while also saving on interest charges.
Cash advance fee
A cash advance fee is a fee charged to withdraw cash from your credit line. Still, it’s best to avoid cash advance credit cards, as they don’t offer grace periods and interest is calculated from day one.
Foreign transaction fee
Some credit card issuers charge a foreign transaction fee when you use your card to make purchases outside the U.S. or make a purchase online using a foreign currency. If you travel abroad frequently, it’s good to have a credit card with no foreign transaction fee.
Late fee
A late fee is the amount a credit card issuer may charge if you fail to make at least the minimum payment due by the billing due date. These typically range from $25 to $40.
Credit card companies offer different types of credit cards to serve different needs. Here are some options you could explore:
Once you decide which type of credit card to apply for, you’ll need to narrow down your search results. Ask yourself these questions to help weed out cards that aren’t the best fit for you:
When you’re ready to apply, card issuers may ask for the following information:
Each time you apply for a credit card, a hard inquiry will typically appear on your credit report and lower your credit score by a few points. A hard inquiry can stay on your credit report for two years — however, the negative impact will lessen over time.
There are cards available that don’t require a credit check when you apply. However, those tend to be secured cards that require a security deposit.
When you’re ready to apply for a credit card, you can submit a credit card application online, in person or by responding to card offers that come in the mail. Here’s how each process works:
The process of applying for a card varies. You may receive an immediate approval or denial, or your application could be placed under review. Once approved, though, many credit card issuers will send a physical card through the mail within 10 to 14 days. Plus, some companies, like American Express, give you an instant credit card number, so you can begin using your card right away.
If your application is denied, don’t lose hope. Here are some steps you can take:
Credit card companies are required to tell you why your application was denied. Review the explanation to find out if there’s an issue you need to address. You can call the reconsideration line and ask for your application to be reviewed again.
Disputing negative records and establishing on-time payment history with other accounts, such as student loans, could help improve your credit score for future applications.
Paying off balances on other credit cards can help lower your credit utilization ratio — the amount you owe divided by your credit limit total. In fact, we recommend keeping your credit utilization below 30%.
Secured cards and credit cards geared to borrowers with average or fair credit could be easier to get approved for.
Applying for cards back to back could result in multiple credit inquiries, which could cause a larger credit hit. Consider holding off on other card applications until you’re in a better position to qualify.
Credit card companies usually ask for personal information like your name, address, Social Security number (or tax ID), annual income and employment information.
Applying for a credit card online is considered safe if you’re following basic internet safety protocols, which include making sure the site is secure and checking that the URL starts with “https” rather than just “http.” It’s more convenient, since you can do it from your couch. However, applying in person could make sense if you’re loyal to a bank or credit union and you prefer an in-person customer experience.
Not all credit card issuers offer joint credit cards. Before you apply for a credit card, you can ask an issuer if they offer joint credit cards or consider a card from U.S. Bank or PNC Bank. Your local credit union might offer them as well.
Applying for multiple credit cards can trigger multiple hard inquiries that show up on your credit report and negatively affect your credit score. Many inquiries can also signal to creditors that you’re facing hardship, so it’s best to hold off on turning in multiple applications, especially if you’re planning to apply for a car or home loan in the near future.
You can apply for a credit card with bad credit, but the approval odds are lower. And if you do qualify, you could get higher interest rates and less desirable terms. Improving your credit before applying could help you qualify for better card offers.
The content above is not provided by any issuer. Any opinions expressed are those of LendingTree alone and have not been reviewed, approved, or otherwise endorsed by any issuer. The offers and/or promotions mentioned above may have changed, expired, or are no longer available. Check the issuer's website for more details.
