Credit Card Application

Manshu Verma asked:




How does applying for a credit card hurt my credit score?

Every time you apply for a credit card, the credit card company makes an inquiry into your credit report. These are also known as hard pulls. Each of these credit inquiries or hard pulls, take away around 5 points from your credit score.

The rationale behind taking away points from your credit score when you apply for credit, is that, it is harder to control multiple lines of credit when compared to just a few. It also shows a tendency that leans towards getting excessive credit and then getting into a spending spiral, which may become difficult for you to get out of and as a result your chances of default become high.

These inquiries show on your credit report for a period of one to two years, but the dent in score itself will be rectified in about a couple of months, if you do not abuse your newly available credit.

If your credit application gets approved, then your score will rise fairly quickly because the additional line of credit will give you a boost. Along with this, your ‘debt is to available credit’ ratio will also improve and that will help boost your score too.

Be aware of the credit application spiral

The people who are worse hit are the people whose credit application gets rejected. When their application gets rejected, their score goes down. However, since their application has been rejected, they apply again thereby reducing their score further and chances are that they will get rejected once again. This is a vicious circle and if you get into this kind of thing four or five times, then your credit score takes a bigger hit.

So be careful, and next time you are tempted to apply for that store credit card that will give you $10 off on a new shirt, think twice!

Angela

Joseph Kenny asked:




If you have never applied for a credit card before, there are things you will need to know about them. Credit cards can bring you a convenience which is unrivaled by using cash or checks. Despite this, using your credit card improperly and can lead to a financial hardship which is difficult to overcome. Many credit card companies will now allow you to apply for cards online. This has made it easy for people to compare credit card offers.

The first thing you want to do is look for a credit card which interests you. It should be a card which has a low interest rate, and you will also want to get cards which have no annual fees. Some companies offer an introductory rate of 0% APR for the first 6 months. There are a large number of reputable sites online where you can compare credit card offers side by side. Make sure that the site you use is encrypted.

When you apply for the card, you will need to have some basic information on hand. You will need your social security number, driver’s license information and your address. You may also have to submit your date of birth. Once you submit your application, the credit card company or bank will review it. The amount of time it takes for them to approve or reject your application varies. It could take a few weeks, and the better your credit, the faster the process will take.

When you go online, remember that not all websites may be secure. Look for sites which use an SSL encryption system. You don’t want to submit your personal information to sites you’re not sure about. You can apply for one credit card, or multiple credit cards. It is important to remember that having too many accounts could lower your credit score. There are limits to how many cards you can have, and this is usually based on your income. It is also not necessary to have a bank account in order to be approved.

If you have detailed questions, it is best to contact the customer service department. Shopping for credit cards online can allow you to compare the different offers available from the comfort of your home. You can look for the best interest rates and features. While shopping for credit cards online is fast, it is important to remember that some websites are fraudulent. Applying for credit cards has never been easier.

Karen

Morgan Hamilton asked:




It can be a devastating day when you receive a denial letter in the mail when you were expecting a shiny new Citibank credit card. The first question you are likely to ask is, “Why was I denied?” There are several reasons why your Citibank credit card application would be denied including lack of income and already owning too many cards. The purpose of this article is to explain the five top reasons you may be denied for a Citibank credit card.

You’re not old enough -

It may seem strange but every year Citibank receives applications from teenagers hoping to get a credit card. While this may seem like fraud, most of these kids aren’t trying to be deceptive. They simply do not know that you have to be eighteen in order to qualify for a card. This has become more prevalent since teenagers have access to so many other things, such as email and cell phones, that once were reserved for adults.

You don’t make enough money -

This is probably the second most common reason for your Citibank credit card application getting denied. A certain amount of steady income is required in order to qualify for a Citibank credit account.

You haven’t been at your residence or your job long enough -

Citibank likes to see a person has stability. One of the ways it notes this is by the length of time at your current residence and occupation. If you’ve recently moved or switched jobs, your Citibank credit card application will be denied for this
reason.

Your credit history is too short or too bad -

This is the main reason applications are denied. If your credit score is below a certain number (which varies from card to card) you will be considered too high of a risk to issue a card. If you have none or too little credit, card companies feel this is just almost as bad as poor credit since they have no basis for trusting you.

You already have too many cards -

Citibank, like any credit card company, doesn’t like to see people opening too many accounts. It may indicate that you aren’t good with your credit (if your cards are maxed out) or that you may end up in trouble later on (if you max out the cards and then can’t pay for them), so most lenders will stop issuing you cards after a certain number.

Jesse

Albertina Belmont asked:




If you are considering applying for a credit card, there are several things that you have to keep in mind. Some people have the misconception that these cards are issued only by banks. Though banks are the major organizations in this field, but there are several consumer and retail stores as well that can issue credit, cards to you for various purposes. You can use these cards to make purchases up to a certain limit. There are so many different types of cards in the market – the choices available to you are simply overwhelming. Depending upon your specific needs and requirements, you can choose a card that is the most suitable for your case. The following is a brief guide on how to apply for a credit-card.

The Basics
When it comes to applying for a credit card, there are two easy ways to do that – you can either apply online or on phone. However, before you go ahead and apply for it, you are strongly recommended to first do a thorough research. You must know what options are available to you. So, try to find extensive details on the various plans, the rates they charge, the limits they offer, the additional features (such as, rewards), and other terms and conditions. You can find plenty of information about all this in newspapers, magazines, or on Internet.

Manual Application
If you are applying for a credit, card manually, it is very important for you to make sure that the application you are filling is not a photo copy – it must be the original document, duly endorsed by the credit-card company.

Applying On Phone
Every company has a toll free number for its customers. So, if you want to apply on phone, you just have to give a call to the company on its toll free number (800-). You can find this number at various places, such as magazines, newspapers, yellow pages, and on Internet.

Applying Online
This is the most preferred method and is also the easiest and fastest one. If you want to apply online, all you have to do is just to visit the official website of the company you want to sign up with and then fill out the application form.

Comparison Shopping
Like with anything else, it always pays to do a thorough comparison shopping before applying for a credit card. Compare different features offered by different plans, such as schemes for balance transfers and cash advances, grace periods, penalties, interest-free days, credit limits, APR, and interest rates (fixed or fluctuating). Research your own requirements and then choose the one that suits the same.

The next thing that you have to do is to check the terms and conditions of applying, such as the kind of documents you will be required to submit along with your applications. Such documents usually include address proof, date of birth, social security number, and driving license number. However, you do not necessarily need to have a bank account in the same bank that is issuing where you are applying for a credit, card.

Roland

Joseph Kenny asked:


Although they can be painful at times, life today without the ease of a credit card is no longer a reality. So, if you think you want a credit card, here are some essential factors you’ll need to consider when applying for a credit card:

Your Credit History

One of the most essential elements to applying for a credit card is what you current credit history is.

* If you have a bad credit history, then it is going to be much harder applying for a credit card.

* If you have a good credit history, then it is going to be much easier applying for a credit card.

* If you have no credit history, then you may well need to create a credit history, by having a loan or hire-purchase agreement, before you can apply for a credit card.

If you’re in any doubt what your credit history may be, then you should apply for a copy of your credit history. You can do this by applying for a copy of your credit history from a credit reference agency – who may charge you a small sum for providing this to you.

Credit Card Limit

Having discovered that you have a good enough credit history to apply for a credit card, the next thing you need to do is to decide on how much of a credit line you want to apply for. Normally, what your income is will decided this – but sometime your savings can also be important.

Depending on what your income and savings are, you can then apply for a regular credit card, gold credit card, or platinum credit card.

Submitting Your Credit Card Application Form

You now need to go through the process of choosing which credit provider meets your needs. Once you have done this, you can then submit an application to that credit card company.

Once the credit card company you have applied to has reviewed your application form, they’ll either approve your application or ask you to comply with certain conditions. The type of conditions they may ask you to comply with include asking you to have some money on a deposit account with them.

Credit Card Application Is Refused

If your application for a credit card is refused, you must ask why. If you don’t, you’ll never know whether the application has been refused because you failed the credit rating test or because you completed the application form wrong!

If you failed the credit rating test, then you know you need to apply for a credit card with another credit card provider. However, if it is because you filled in the form wrong, you can still reapplying using a correctly completed application form. So don’t be shy to ask “why?” if the credit card provider tells you that you failed in your credit card application!



CARROLL