Learning how to get a credit card the SMART way is extremely important. While pretty much everyone over the age of 18 (and sometimes even those who are much younger!) gets swamped with credit card offers in the mail that does NOT mean that the best way to get a credit card is to simply wait for those offers to arrive in your mailbox and then start sending the credit card applications back in willy nilly. Here is everything that you need to know to get a credit card the smart way.
Why Use Credit Cards?
First of all, I think that it is important to talk about why using a credit card is important in the first place. You may have heard some people say that credit cards are to be avoided. Well, that is simply not true. Credit cards, when used properly, have a number of enormous benefits. Here are some of the benefits to using a credit card:
- Credit History – The earlier that you can obtain a credit card and start to build a length and blemish free credit history the better. Just as many college students make the mistake of abusing credit cards during their younger years and running up large balances and making late payments there is another very insidious mistake that younger people can make which is waiting too long to have a credit card. The longer a person has a blemish free credit history then the better of a credit score that person will have (everything else being equal). If you have doubts about how you will use your very first credit card (or if you are concerned about your child getting their very first credit card) then simply commit to using the credit card just like a debit card. If the money is not in the checking account and ready to pay off the card balance at the end of the month then do not use the credit card. It’s really that simple.
- Cash Back – Many credit cards are termed cash back credit cards because for every dollar that you spend with the credit card you can receive cash back from the credit card issuer of anywhere from 1% all the way up to 5%. If you can discipline yourself to pay off your credit card balance in full every month then you have just earned yourself a 1% to 5% discount on everything that you have purchased for the month! Think of it like your own personal 1% to 5% off coupon that you can use no matter where you shop. Of course, not all cash back credit cards are the same so be sure and use our free credit card “Chaser” tool on our home page to find cards and compare the best cards in each of the different categories.
- Convenience/Security – Convenience and security really go hand in hand with having a credit card. Not only are credit cards accepted at almost every place you could possible want to buy something from both online and offline but if something bad happens to your money (i.e. fraud or theft) then almost every credit card issuer will make sure that you are taken care of. Getting this same level of fraud protection with a debit card is usually not as reliable and of course with cash the fraud protection is nonexistent.
There are many more benefits to owning and consistently using a credit card but the 3 reasons mentioned above are some of the most important reasons. Above all else, make sure that you don’t let your desire for being responsible with your money (definitely a good thing!) keep you from missing out on some of the great benefits that having a credit card can bring you when credit cards are used in the proper way.
How to Get a Credit Card with Bad Credit
One of the major things that could keep you from getting the credit card that you want is bad credit. While having bad credit is certainly a negative when it comes to searching for a credit card there are bad credit credit cards designed specifically for those with less than stellar credit and there are also some tips that you can use to still find a good credit card even with bad credit. Here are some tips for finding a credit card even with a bad credit history.
- Start Small – While it is safe to say that having bad credit will usually prevent you from being approved for a Visa Black Card with a $50,000 credit limit it does not necessarily mean that you will get turned down for a less prestigious card. Start small and slowly build up your credit score and credit history by applying for a store credit card with a small credit limit, a secured credit card, a prepaid or debit card, or even a hotel credit card that is sponsored by a particular hotel chain that may be a little more lenient on their acceptance criteria than some of the other larger and more well known cards. As you build up your credit history and faithfully make payments on time every time your credit score will increase and with it your ability to be approved for more and more types of credit cards.
- Try, Try Again – If you apply for a credit card and get declined then don’t give up! Every credit card is different in that each card has different approval criteria. Even cards from the same credit card issuer often have drastically different qualifications for being approved. Some cards are designed specifically for the small percentage of the population with close to perfect credit while others are designed for those with average credit and yet others are designed for those with less than average credit. Do your homework and don’t get discouraged.
- Watch Your Credit Score – What could very well be the most important step for getting a credit card with bad credit is to have a firm grasp on what your credit score is and what steps you can take to improve your credit score. Get a free credit report from all 3 credit reporting agencies, check to make sure that there are not any errors in your credit report that are adversely affecting your credit score, and then use a credit monitoring service to make sure that you are alerted if there is anything that causes your credit score to drop.
No matter what your credit history is you can always start over and obtain a credit card even with a bad credit history if you simply take responsibility and discipline yourself to make wise financial choices.
How to Apply for a Credit Card
There is really nothing at all to learning how to apply for a credit card. The most important thing to know before starting the credit card application process is what the factors are that the various banks and credit card issuers use to determine who they will extend credit to and who they will refuse to extend credit to.
While all cards and credit card issuers are different most credit card applications will have questions dealing with:
- Age (must be 18 or older)
- Annual Income (most cards require a minimum of $12,000 a year in income to be approved for a credit card)
- Employment History (the longer the employment history the better)
- Types of Financial Accounts Owned (checking account, savings account, investment account, etc.)
- Breakdown of Your Monthly Expenses (amount spent on rent/mortgage payment, car payment, child support, etc.)
Once you understand some of these factors on the application that affect the approval decision for a credit card then all you have to decide is how you want to apply for your credit card: online or with a paper application. Each of the 100′s of credit cards that can be found using our free credit card “Chaser” tool have online credit card applications that take place place securely and privately direct on the credit card issuers website. One of the advantages of completing a credit card application online is that many times the credit card issuer will give an instant approval rather than having to wait weeks to find out if you have been approved or not via snail mail.
2 Very Different Ways to Get a Credit Card
There are really 2 very different ways to go about getting a credit card. The first (and most common) way is to sit back and absorb the credit card marketing messages that constantly bombard us on a day to day basis. TV commercials, junk mail, newspaper inserts, promotions at your bank, promotions at your college, the list goes on and on (in fact, if you find yourself just inundated with junk mail from credit card companies then you can get some information on how to stop the credit card junk mail by visiting FTC.gov). This way is the easiest way to get a credit card. You just sit back and let whoever has the loudest marketing voice get your business. Is this really the best way to find a GOOD credit card? You may get lucky and open a piece of junk mail to find a card that will give you everything you need but rather you will just get the card that has the highest profit margins for the credit card issuer (or maybe a great card but just not the best card for your particular spending habits).
The second way to get a credit card is to be proactive in searching out credit cards and comparing the relative pros and cons of each of the different cards offered by the various banks and other credit card issuers. If earning cash back is important to you then make sure to compare the best cash back cards. If earning travel rewards and free flights is important to you then be sure and compare all of the best travel rewards cards. The most important thing is that you are taking the initiative to get the credit card that will best meet your needs and NOT the needs of the credit card issuer.
Learn how to get a credit card the SMART way. Be proactive in your search. Use our free credit card “Chaser” tool on our home page to find and compare 100′s of the top credit cards today!
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