Useful Tips Before Applying for a Credit Card

Applying for a credit card can be a daunting task if it is your first. Before applying for a card, make sure you are aware of the following tips:

Impact on credit score

Applying for a credit card will result in a hard inquiry into your credit report. This means that the credit card issuer will request for your full credit report. The impact of this inquiry varies from person to person. A hard credit inquiry can result in a 5-point drop in your credit score. Do not allow hard inquiries on your score if you are not certain you will follow through with the product.

Security

Credit card applications ask applicants to provide personal information, because of this some hackers have set up fraudulent websites intended to steal data. It’ s crucial that you apply for a credit card from a major bank. If applying online, you must make sure the URL of the website begins with “Https” rather than “http”.  Websites with “https” ensure that data will be sent over a secure connection and helps to avoid identity theft.  

Understand Spending Habits

If you tend to spend a lot of money on certain categories like travel, grocery or gas, it’s important to get a credit card that allows you to get rewards for spending in these categories. These rewards can come in the form of cash back, points and miles. This is a great way to get money back from your normal spending as long as you pay your bills off every month on time. For example, if you are a big spender on travel, get a travel rewards card that rewards you for every travel expense.

Read & Research

Research about each credit card in depth before applying. Understand the APR, annual fee (if any), and other fees that come with the card. Also, take advantage of credit card comparison sites(ex. www.creditcards.com/)  to find the best card for you. These sites will help you find credit cards with low fees, generous reward programs and credit score requirements that match your profile.  In addition, always read the terms and conditions on every credit card application. Take your time and pay attention to every field on the credit card application, if you don’t understand, call the credit card company and ask.

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