How To Avoid Unnecessary Credit Card Rejections
Different credit cards require different credit scores for approval. For example, the premium rewards credit cards often require a higher credit score and a longer credit history due to their underwriting criteria.
Applying for a premium card, or any card designed for high earners with excellent credit scores, if you have little or no credit history, may set you up for rejection and disappointment. Instead, you may want to consider applying for a specifically designated student credit card. And dont worry some credit cards for college students have great rewards programs, too.
In addition, incorrect personal information, or lack of some vital information for the application, can also trigger the credit card company to decline your application. When you do apply, make sure to have all of your information ready and make sure everything is correct. Some of the information you might need includes:
- Social Security number
Become An Authorized User
A primary credit card owner can add an authorized user to his or her account. Authorized users are allowed to make purchases with an account, but they cannot make changes to the account, nor are they held responsible for making payments.
Being an authorized user can be a good way to establish or rebuild credit because in most cases, the account activity is reported on both the primary cardholder’s credit reports and the authorized user’s credit reports . It is also the only way someone under the age of 18 can get a credit card.
Once listed as an authorized user on an account, you can make purchases with the card. It’s important to establish guidelines with the primary cardholder about how much you can spend. Remember, if the primary cardholder does not make payments on time or if either of you use too much credit, that can drag down the credit scores of both the primary holder and authorized user.
Chase Freedom Unlimited: Best For Future Value
Sign-up bonus: $200 bonus after spending $500 in their first three months from account opening. Plus, earn 5% cash back on grocery store purchases on up to $12,000 spent in the first year.
Annual fee: $0
Rewards: Earn 5% back on travel booked through Ultimate Rewards, 3% back on dining and drug stores and unlimited 1.5% cash back on all other purchases.
Why its a great first credit card: The Chase Freedom Unlimited is a great starter card because its buildable. When you have this card by itself, youre earning at least 1.5% cash back on all purchases. However, as you get more comfortable with credit card rewards, this is an easy card to pair with other Chase cards to round out a complete credit card strategy.
When you combine this with the Chase Sapphire Preferred, Chase Sapphire Reserve or the Ink Business Preferred Credit Card, you can merge the rewards you earn on the Freedom Unlimited with your other point balances to effectively convert your cash-back earnings into full-on Chase Ultimate Rewards points which means you can transfer the points you earn on it to one of Chases 10 airline or three hotel partners or redeem them for added value directly in the Ultimate Rewards travel portal. Ultimate Rewards points are some of the most valuable points for travel redemptions, and who doesnt love free travel?
Sign-up bonus: 20,000-mile bonus after spending $500 on purchases in the first three months of account opening.
Annual fee: $0
Also Check: Capital One Savor Visa Or Mastercard
What To Do If You’re Denied A Credit Card
Don’t fret if you don’t get approved with your first applicationyou may be able to qualify for other credit cards. But first, try to figure out why your application was denied.
Ask the card issuer if there was a specific reason, such as your income being too low or not meeting one of the basic eligibility requirements. If the card issuer determined your credit wasn’t good enough for approval and denied your application, it must send you an adverse action letter explaining this. If you’ve received an adverse action letter in the past 60 days, you’re eligible to receive a free copy of your credit report through Experian and the other credit bureaus.
You can then focus on the issue by increasing your income or building your credit before trying again. Or, if you were denied because you don’t have any credit, you could look for a card that doesn’t require a credit check, such as the The OpenSky® Secured Visa® Credit Card. If you pay utility, internet or cellphone bills, Experian Boost may be able to give you a much-needed lift.
Confirm You Have Enough Income
If youre at least 21 years old, you can list household income and assets that you have reasonable access to on your credit card application. Applicants who are 18-20 years old can only list independent income and assets, but even having a part-time job should provide enough income to get a credit card for the first time.
Read Also: Www.macys.com/mymacyscard American Express
Tips On Using Your First Credit Card
How you use your first credit card can either help or hurt your credit. Here are some things to keep in mind to stay on top of your finances.
1. Make Your Payments on Time
No matter which card youâre approved for, your payment history is an important part of your credit scores. In fact, the FICO credit-scoring model calculates your payment history as 35% of your credit score.
And missed or late credit card payments donât just affect your credit. They can also lead to late fees or an increase in interest rates.
Making at least your cardâs minimum payment on time can help you avoid penalties and keep your account in good standing. Just remember that if you only pay the minimum, youâll likely be charged interest on the balance youâre carrying.
Some credit card companies like Capital One also allow you to set up automatic payments. This way, a payment of your choice is automatically made on your accountâs due date each month. It can be a helpful way of making sure you donât accidentally miss a due date.
2. Keep Your Account Balance Low
In addition to paying your bills on time, staying below your credit limit could also help you improve your credit scores.
Thatâs because your scores are affected by your , or how much of your available credit youâre using. In fact, the Consumer Financial Protection Bureau says experts recommend using no more than 30% of your total limit to help maintain good credit.
3. Stick to a Budget
4. Check Your Monthly Statements
Understand What A Credit Card Isand Isnt
But despite a credit cards benefits, its important for first time credit cardholders to understand that a credit card isnt a source of free money. You must pay back every purchase. And if you dont pay off your balance in full each month, the remaining debt usually starts to accrue interestwhich can quickly spiral out of control if youre not careful.
Recommended Reading: How Do I Check My Cabela’s Credit Card Balance
Things To Know Before Getting Your First Credit Card
Many or all of the products featured here are from our partners who compensate us. This may influence which products we write about and where and how the product appears on a page. However, this does not influence our evaluations. Our opinions are our own. Here is a list ofour partnersandhere’s how we make money.
Getting your first credit card is a huge milestone and a big adjustment. You might already have a sense of how credit cards work and how to handle a credit card responsibly, but the devil is in the details. Understanding those ins and outs before diving in will save you money and help you build good credit more quickly.
As a newcomer to credit, you probably wont be able to qualify for the most valuable credit cards the ones with rich rewards and perks, big sign-up bonuses or long 0% interest periods. Those cream-of-the-crop products are available only to applicants with good or excellent credit and longer credit histories who meet certain income requirements.
You’ll likely have to start smaller with your first credit card, with a product geared toward people with limited or no credit history. It’s not all bad news, though many such cards offer decent rewards and don’t charge annual fees. Some options to consider include:
If youre having trouble getting approved for your first credit card say, because you’re starting out with no credit at all try a .
It’s possible to avoid credit card fees altogether, even if you’re new to credit:
Top Credit Cards To Help You Get Started
While many credit cards exist for beginners, it’s important to note that you likely won’t have a high when you just start out.
This is because a lot of the credit cards that you’ll be able to qualify for with very little credit history are secured credit cards. These cards differ from traditional credit cards in that they typically require cardholders to make a security deposit upfront that acts as your credit limit. For the bank, this deposit acts as collateral in case you don’t pay your bills each month. Some of the best secured cards include the Secured Mastercard® from Capital One for a low deposit requirement and the Citi® Secured Mastercard® for low interest from a major bank.
But not all are secured cards or require the means to put down a security deposit.
The Petal® 2 “Cash Back, No Fees” Visa® Credit Card is a great option for applicants with no credit history at all and the Deserve Digital First Card is perfect for international applicants since you don’t have to be a U.S. citizen to qualify.
And for those currently enrolled in school or planning to go back, college student credit cards are a smart choice for students looking to establish credit. The Citi Rewards+ Student Card is best for making small purchases and supermarket shopping, while the Deserve® EDU Mastercard for Students is best for international students with no credit history.
You May Like: How To Pay Best Buy Credit Card On App
Understand The Basic Requirements
You have to be at least 18 years old to apply for a credit card, and if youre between 18 and 21, you have to show proof that you can pay off the card.
Youll also need a social security number.
If youre not a student, youll need to prove income and .
And if youre interested in a secured credit card to build credit, you may have to put down a deposit.
Using Your Credit Cards Responsibly
No matter what type of first credit card you get, it is important to use it responsibly in order to build a strong credit history and stay out of debt. Follow these tips to ensure your credit card usage helps your credit history and scores in the long run”
- Pay your bills on time each month, as payment history is one of the most important factors in calculating your credit score. Consider setting up automatic payments so you’re never late.
- Keep your credit utilization ratio or the amount of credit you use compared with the amount of credit you have available to you, below 30%. Utilization is based only on your revolving credit lineslike credit cardsand is the second most important factor in calculating your credit score.
- Take advantage of all the rewards and benefits your card offers to maximize the card’s value.
- Practice responsible spending and don’t spend more than you can afford to pay off at the end of every month. Using a budget is a helpful way to make sure you don’t overextend yourself while using credit.
Want to instantly increase your credit score? Experian Boost helps by giving you credit for the utility and mobile phone bills you’re already paying. Until now, those payments did not positively impact your score.
You May Like: Why Is Google Services Charging My Credit Card
Can I Be Approved For A Credit Card With No Credit History
There may be suitable credit card options for people with no credit history. If you have no credit, you might want to consider a student credit card, which offers a low credit limit for you to get started. If you aren’t a student and have little to no credit, you may find secured credit cards useful as your first cards.
How To Apply For Your First Credit Card
Even though applications vary depending on the card issuer, there are a few steps you can take to prepare before applying for your first credit card.
When youâre trying to figure out how to get a credit card for the first time, it could be helpful to take a look at your credit score and history before doing anything else. Once you know where you stand, consider sticking to cards that match your credit level. You may improve your chances of being acceptedâand limit hard inquiries that can impact your credit.
Checking whether youâre pre-approved or pre-qualified is another great way to improve your chances of approvalâand to avoid unnecessary hard inquiries on your credit reports. With Capital Oneâs pre-approval tool, for example, you can find out whether youâre pre-approved for some of Capital Oneâs credit cards before you submit an application. Itâs quick and only requires some basic info. And checking it wonât hurt your credit scores, since it only requires a soft inquiry.
When it comes to the actual application, be prepared to provide your personal informationâthings like your Social Security number, employment status and income. Card issuers may use that informationâalong with your credit history and scoreâwhen considering your application.
What to Expect After Applying for Your First Credit Card
You May Like: Techronadvantagecard Com Offer
How To Get A Bigger Initial Credit Limit
You may be able to get a higher credit limit on your first credit card by applying jointly with someone who already has an established credit history and good income. Another option is applying for a secured credit card whereby you place a security deposit for the amount of credit you’d like.
For example, you’d make a $2,000 security deposit for a $2,000 credit limit. With a secured credit card, your security deposit is returned to you as long as you keep the account in good standing. Starting with a bigger credit limit, and managing it responsibly, will make it easier to get approved for unsecured credit cards with larger limits. Your security deposit is off-limits until you close your credit card, so only use money you can spare during that time.
Choosing The Right Card For You
Don’t expect your first credit card to come stocked with rich rewards, lavish perks or a generous no-interest period. Those kinds of goodies are available only to people who have already built good to excellent credit. Your first credit card will probably be more modest a card to help you walk before you run. Options include secured cards, store cards, student cards and alternative cards, as well as finding a co-signer or becoming an authorized user on someone else’s account.
» READ MORE: 7 options for your first credit card
Don’t Miss: How To Cancel Chase Credit Card Online
Do I Need A Credit Card
While you don’t need a credit card, there are several reasons why getting a credit card is a good idea:
- Building credit: It’s much harder to build your credit history without a credit card. A limited credit history can affect your life in many ways. The most obvious is that you’ll have trouble getting approved by lenders if you ever want to borrow money. In addition, it can lead to you getting rejected when trying to rent a home, and in many states, it can even result in higher car insurance rates.
- Security: Credit cards are the best payment method from a security perspective. If a thief makes fraudulent charges with your credit card, you can contact the card issuer to get the charges removed and receive a new card. The most you can legally be liable for with credit card fraud is $50. And most card issuers even have zero-liability policies, which means you won’t be liable for fraudulent charges at all.
- Rewards: Many of the best credit cards offer cash back, travel points, or some other form of rewards. This allows you to earn value back on the money you spend.
How Do I Choose The Right Starter Card
It really depends on your credit score and where you’re at in your credit journey. If you’ve never had a credit card before, it’s likely you’ll have to get started with a secured credit card that requires a cash deposit in order to shore up a small line of credit.
Read Also: How To Close Chase Credit Card
Make Sure You’re Ready For Your First Credit Card
Being old enough to qualify for a credit card does not mean youre ready for one. You need to be responsible enough to charge only what you can afford and to pay your bill every month without being reminded. Getting your first credit card before being fully prepared can spell disaster for your credit. Once your credit is damaged, it can be difficult getting it back on track.
Dont set yourself up for failure learn all you can about credit cards before getting one. If you’re not ready, there are steps you can take to get there.
Applying For A Student Card As Your First Credit Card
Student credit cards are designed for students and can be a good option for young people with little or no credit history. These cards can help students establish a credit history and build credit scores while learning how to responsibly manage their finances.
Student cards are generally backed by major credit card issuers, and your payment and account information is typically reported to one or more of the three major credit bureaus.
Don’t Miss: Td Bank Visa Gift Card Balance Checker