Things to Do Before You Apply for a Credit Card

Get ready for your next credit card. If you’re thinking about putting in a new card application, here are some things you should do first.

Make sure you can handle another credit card. Too many cards can be dangerous for your finances. There’s a point where too many credit cards can hurt your credit score. Since credit score calculators haven’t told us what that point is, it’s guesswork. But know that if you get too many cards, your credit score could be affected.

Not only do too many credit cards have an impact on your credit score, it can also make it harder to manage your finances. The more cards you have, the more you have to keep up with. You’ll have to manage balances, credit limits, and monthly payments. If you’re not using all your cards periodically, you risk having them closed. So you also have to remember which credit cards have been used recently and which have not.

Check your income. All credit card applications now ask for your income before you can be approved. Before you apply for a credit card, check your monthly and annual income so you’ll know you’re putting in the correct number. If you report an income that’s too low, your credit card application could be denied.

Review the credit card disclosure. The credit card disclosure contains all the pricing information for the credit card you’re considering. You’ll find out the interest rate, annual fee, and any other fees that impact how much you pay for the credit card. If you don’t agree with the terms of the credit card, for example the interest rate is more than you want to pay, then you shouldn’t apply for it. You can continue to shop around for a better credit card.

Confirm you don’t have another credit card just like it. There’s not really a benefit in having two credit cards in your wallet that are just alike. If you’re going to apply for a new credit card, choose one that has something different to offer than all the other credit cards in your wallet. For example, if all your current credit cards have high interest rates, choose one that has a low interest rate. Or, maybe the new card offers cash back rewards while your reward card gives you points on purchases.

Make sure you haven’t applied for too many credit cards recently. Think about how long it’s been since you applied for your last credit card. Too many recent credit card applications can get your latest card application denied, even if you have a good credit score and meet the income requirements. That’s because credit card issuers see too many credit card applications as a risk. Either you’re taking on more credit than you can handle or you’re in a financial bind and you’re looking for credit to bail you out. Keep your credit card applications to a minimum to improve your chances of getting approved.