More and more people are discovering how convenient and easy it is to use a credit card to make purchases. Are you planning to apply for a credit card in the near future? Here are a few things to keep in mind:
Will I qualify for a credit card?
The main factors that credit card issuers look at are your credit score, your credit report and your monthly income.
Credit score: If you have a credit score of 750 or above you have a good chance of being approved for a credit card. If you have a lower score, you might still qualify for a card but you might be offered stricter terms and conditions including a higher interest rate on your outstanding and lower credit limit. It is a good idea, therefore, to make sure that you improve your score to 750 before you apply for a card in order to avoid rejection or unfavourable terms.
Credit Report: Lenders look at your credit report to see your repayment history and to see if you have made your payments on time in the past. Obtain a copy of your credit report to see if there are any weak areas in your credit history that you need to work on to increase your chances of being approved for a credit card.
Monthly income: Lenders look at your monthly income to judge if you will be able to make your payments in a timely manner. Check the income eligibility on the various credit cards so that you only apply to the ones that you are eligible for. If you apply for a card that requires a higher income than your present income, there is a good chance that your application will be rejected.
How do I choose a credit card?
There are so many credit cards on offer today that deciding which one is right for you can be very confusing. Take your time to research the various credit cards available in the market, keeping in mind the following:
1.The interest rate charged on the outstanding
2.The rewards plan offered and whether it is appropriate for your lifestyle
3.Annual charges and other fees
Applying for a credit card for the first time?
If you have not applied for loans and have never had a credit card before, your credit score and credit history will be insufficient for lenders to make a decision on whether to approve your loan or card application. People who have little or no credit history are rejected for this very reason. If you are a first time applicant, check your credit score and improve it to 750 , if required. Also take steps to make your credit history more substantial by, for example, using a secured credit card. Do not apply if you have a low score or thin file because you will be rejected, causing your credit rating to drop even further.