Credit cards have multiple benefits: They’re a safe way to spend money, they’re useful in emergencies, they can boost your credit score, and they may even pay out rewards when you use them. But for newcomers, figuring out how to open a credit card can be challenging.
To make it a little more manageable, we’ve broken down the credit card application process into five easy steps:
1. Check your credit score
Your credit score is a creditor’s first line of defense in determining your creditworthiness. A lot of weight will be put on your credit score when you apply for a credit card. Knowing which credit score range you fall in will help you identify the right cards to apply for. For example, if a credit card company advertises cards for people with excellent credit (800+ credit score) and you fall in the fair credit range, then you’ll probably want to steer clear of that specific card.
Credit scores are based on your payment history, credit utilization, credit age, credit mix, and how often you apply for new credit. You can check your credit score through a credit card issuer or by ordering it from one of the three main credit bureaus: TransUnion, Equifax, or Experian.
2. Choose a card that meets your needs
To narrow down your list of options, start thinking about what you need from a credit card. For instance, if you have no previous credit history or score, you’ll want to look for a credit card that doesn’t require those, such as a secured credit card. Secured credit cards are a common tool for beginners to build credit and only require a cash deposit to open.
You can also consider a retail credit card if you’re new to credit. Store credit cards are generally easier to get approved for, but be careful: They often incentivize you to shop at a retailer more than you might otherwise.
If you’ve already got a solid credit score from previous credit cards or other types of loans, you may be able to apply for a rewards card. Rewards credit cards offer incentives to consumers with stronger credit scores, such as cashback or travel rewards. There are several types of credit cards out there, so do your homework to figure out which ones best cater to your needs.
And remember: It’s okay to have multiple credit cards, as long as you can keep up with the payments.
3. Get preapproved
Some credit card issuers allow you to see if you’re “preapproved” or “prequalified” for their credit cards. To do this, you’ll need to fill out a form and submit your personal information via the card issuer’s website. Once you’ve submitted the form, the card issuer will initiate a soft inquiry on your credit report. A soft inquiry will not affect your credit score.
If you receive a preapproval notice, you’ve met all the lender’s criteria thus far. A preapproval indicates you are likely to get approved, but approval is not guaranteed. You’ll still need to apply for the card to be fully approved.
4. Decide how to apply
Now that you’re ready to apply for your credit card, you’ll need to choose how you want to do it. Depending on the card issuer, you may have a few options:
- Applying online will probably be the quickest and most convenient method — you may even get approved instantly.
- If you prefer a face-to-face experience, you can also apply in person. Applying in person will allow you to receive a quick response on approval, and you can ask questions in real time.
- You may also apply over the phone, but keep in mind that you might be put on hold for a while.
- The last and least convenient option is applying through the mail. If you opt for this method, consider that it could take weeks to receive a response.
