Credit cards offer convenience because you don’t have to carry cash, plus you can earn rewards for using them. Before you can use a credit card, whether it’s a store credit card, business credit card or general credit card — you must be approved. Things to consider include interest rates, credit limits and rewards.
Also, look at your probability of being approved and know how to check if you are approved before applying. Learn how to apply for a credit card and give yourself the highest chance to get approved for the best credit card offers available.
How to Get Approved For a Credit Card
To increase your chances of getting approved for a credit card, take these actionable steps. Here are 10 steps to take when applying for a credit card:
1. Check Your Credit Report First
Check your credit report for errors before applying to avoid having your application rejected for something you could have fixed. You’re entitled to a free credit report from each of the three major credit card bureaus – Experian, Equifax, and TransUnion — from AnnualCreditReport.com once per year.
2. Be Selective in Your Applications
Credit card companies pull your credit every time you apply for credit, which can result in hard inquiries on your credit report, potentially dinging your credit score. So, don’t apply for lots of credit cards at once and hope that at least a few approve you. A lower credit score makes it harder to get approved in the future.
“Being credit-hungry and application-happy isn’t attractive to lenders,” said Sarah Hollenbeck, Personal Finance and Credit Card Expert with Offers.com. “It’s better for consumers to target their applications to one or two cards at a time that they really want and are likely to get approved for.”
3. Check Offers for Pre-Screening
Your mail can often be flooded with offers for credit cards with no credit checks, pre-approved credit card offers or credit cards for bad credit with no deposit and instant approval. Just because you get offers for instantly approved credit cards for bad credit or pre-qualified credit cards in the mail doesn’t mean that you’re guaranteed approval if you apply.
“Sometimes issuers will send out random advertisements,” said Hollenbeck. “The key is to look for the ‘prescreen opt-out’ notice in the mailer. If it’s there, the issuer used your credit to preapprove you for an offer, and you’re likely to be approved.”
However, even if you get pre-approved for a credit card, Hollenbeck said you could still be rejected if something changed in your credit report between the times when the mailing was sent and when you applied, such as making a late payment.
4. Pay Down Debt First
Pay down outstanding debt on existing cards before submitting an application for a new credit card. Typically, it’s good to keep outstanding balances below 30 percent of your credit. Lower utilization ratios are better.
“If your current cards are maxed out, not only will it drop your score significantly, but it will appear as if you’re desperate and out of cash,” said Randall Yates, founder and CEO of The Lenders Network.
5. Report All Income
Credit card applications might ask for your total income — which isn’t limited to your salary from your current job. You might also collect income from a side hustle, rental property income or investment property income. You might also be able to include your spouse or partner’s income, trust distributions, social security and retirement distributions.
6. Apply for a Secured Credit Card
If you have trouble getting instant approval for credit cards because you have no credit or bad credit, consider a secured credit card. A secured credit card requires a deposit to be used if you don’t pay your bill. Otherwise, it works just like a traditional credit card. As long as you continue to pay on time each month, you’ll improve your credit so that you can start applying to cards that require fair credit or even good credit in the future.
7. Use Prequalification Tools
You might get a better idea of whether you will be approved for a credit card or not by doing some research. Sometimes, it can be as simple as watching your mail.
“See which kinds of prequalified offers you’re getting,” said Hollenbeck. “If they’re all from sub-prime issuers targeting those with bad credit, you probably don’t want to apply for premium rewards cards. On the other hand, if you’re getting prequalified offers for high-end rewards cards with competitive sign-up bonuses and 0% [APR] periods, you have a lot of options.”
8. If Denied, Ask for Reconsideration
If your application for a credit card is denied and you think it should have been accepted, call the credit card company and ask to be reconsidered. When speaking with the representative, politely ask why your application was denied and provide information that might help change their mind.
9. Consider a Card Backed By Your Brokerage Account
You could have a hard time getting approved for credit cards with low-interest rates or fancy perks if you have several blemishes on your credit report. If you have assets in a brokerage account, you could instead apply for a debit card backed by your investment account and take advantage of much lower rates. For example, the IBKR MasterCard Debit Card charges between 1.41% and 2.66% APR, which is much lower than average credit card rates.
“People who have stock, but might have credit blemishes, might be more likely to be approved,” said Kalen Holliday, director at Interactive Brokers, a global brokerage firm.
10. Apply Before Making a Big Purchase
If you’re going to spend money anyway, consider applying for a new card with a generous sign-up bonus and a minimum spending requirement. Plus, if you’re going to pay it off over time, you don’t want your credit utilization to increase too much. Make sure you give yourself enough time to be approved and receive the card in the mail. Though some instant approval credit cards offer an immediate decision when applying, sometimes a human still needs to review your application. Plus, it might take 7 to 10 days to get your new card in the mail.
“Usually, new credit card signups come with “freebies” such as 0% APR for a year and at least $100 in cash back,” said Ogechi Igbokwe, founder of OneSavvyDollar and certified financial education instructor. “Why not get money for a purchase you were going to make anyway?”