Things to Look out for before applying for a Credit Card
I’ll be telling you about the things you have to look out for and consider before applying for a credit card. Also, what you’ll do in case your credit card application is refused. I have writing about lots of credit card on this site. But in this particular page, I’ll be considering those important things that you must consider before applying for a credit card.
There’re presently lots of credit cards out there for you choose from. In this site, you’ll find lots of them like Burlington credit card, Carson’s credit card, and Military Star credit card and so on. The list is just endless.
So, any shop can just go ahead and choose the one that suits them. You as intending cardholders should consider certain things before applying for it.
Tips For Applying for a Credit card
Before applying for a credit card, just ponder a while on what you want to use the Credit card for. Some of the reasons can be to buy things online or on holiday, to spread your cost of a purchase, or buying things on holiday.
Then you must consider if you’ll be paying off what you owe on monthly basis or spread your payments over time. Then if you’re sure of paying off the balance in full early enough each month, use the interest-free period advantage.
However, it’s important and better if you consider applying for a credit card with more incentives like Cashback. This is very important to consider whether you can pay the balance in full early or not. It’s wise if you plan in case it turned out that you can’t pay.
What if you want to use the Card for Borrowing?
You must understand that if you’re using the card to borrow money, then you won’t be paying off every month but then, you’ve to pay interest.
If this is the type of card you want to apply for, then, you’ve to choose a credit card with a lower interest rate. Ensure that you can afford a regular repayment.
Important checklist to consider before applying for a credit card
Before you apply for a credit card, ensure to look out for this list. Know what your intending credit card is offering for each of them. Before considering this list, you should have a good credit score.
- The Annual Percentage Rate (APR): By APR, it means the cost of borrowing on the Card. In case you do n’t pay the whole balance off every month. You’ve to consider and compare the APR of the cards
This comparison will help you choose the one with the cheapest APR rate. In addition, compare the fees, Incentives and the Charges.
- Annual Fee: Most credit card issues charge a particular annual fee for using the card. This fee is added to the amount you owe if you don’t pay in due time and in full, you’ll have to pay with interest on the fees and also on your spending.
- Minimum repayment: If you’re not able to pay off the money in the month, you’ll be asked to pay a minimum amount. Most times, this goes for 3% of the due balance.
- Charges: Some cards may bill you for other charges such as going over your credit limit and using your card abroad for emergency late payments.
- Introductory Interest Rates: This stands for the when you start paying off a low rate of interest or you don’t have to pay at all. Sometimes, it can be after 6 months or after a particular date in the year. So, if you’re applying for a credit card, choose the ones with long introductory interest rates. Also, check the interest rate it changes to after the introductory
- The Cash Back: it means the situations when you have some money refunded to your credit card. It depends on how much you spend. Before you apply for a credit card, check for what you’ll qualify for the cash back. Sometimes this works when you pay all your balance in full each month.
- Rewards or Loyalty Points: This point adds up for you depending on the amount your spend. Loyalty points have its cash equivalence in some percentage. Thereafter, you can use it to buy goods. Check out the rewards and where you can use it.
This information will help you compare different credit cards when they’re presented to you. In addition, you can use the comparism website to see the different credit card offers.
How to Apply for a Credit Card
There’re several ways of applying for a credit card. Below are the ways:
- Online Application
- By Post (mail)
- Through Phone
- In the Issuing Bank or the bank representative
Each Credit card issuer has their online application pages, phone hotlines and the designated banks and offices for mails that you can apply for your credit card.
Signing Credit card agreement
Before you finally apply for a credit card for approval, you’ve to sign the credit agreement. It’s a legal document that allows you to get set to the terms and conditions of the card usage.
Always read the agreement and the conditions before you click submit for your credit card application
What happens if your Credit card application is refused?
Your application may be rejected if you have low Credit Score. This means that you’re at a great risk. Ask for the credit requirements or the right Credit reference agency to check your Credit score. Most times, FICO does this in the United States of America.
If your own rejection as a result of race, Sex, disability, Sexuality, religion or where you live, meet an adviser to help you on the next action to take. You can easily get advice from the Citizens Advice Bureau.
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