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Applying for a credit card

A credit card can be useful to have, particularly in the event of having to make an unexpected large purchase or in the case of an emergency. While the application process for a credit card can be relatively straightforward, there are a number of steps you might want to take before you apply.

Do your research

There are a wide range of credit cards available, with some offering different features to others. It’s worth looking into as many different options as possible to ensure the card you’re applying for is right for your circumstances. For example, you might want to look for a card with an interest-free balance transfer rate or one which offers rewards from certain retailers, depending on how you want to use the card.

Check your credit score

Your credit score is a three digit number which lets lenders know how ‘creditworthy’ you are. Factors taken into account when determining your score and compiling your credit report include payment history, amounts owed, length of credit history, new credit and the types of credit used.

Every time you apply for a credit card, a footprint is left on your credit report which could negatively impact your score so it’s worth checking your report before applying for credit to give you an idea of whether you’re likely to be approved or not. Checking your file will also allow you to identify and correct any inaccuracies you find within the report.

Your credit report can be obtained from agencies such as Experian or Equifax for a fee.

The application process

Once you’ve found the credit card that best suits your needs and you’ve made sure you’re likely to be approved by the card provider, you can begin the application process. In most cases, you will be able to apply quickly and easily online but you may also be able apply by phone. As well as standard details such as your current address and phone number, you might be asked for the following additional details when applying for a credit card:

  • Address history, usually for the previous three years
  • Employment status
  • The length of time you’ve been with your current bank
  • Details of any balance transfer which is to be applied to your new credit card

Managing your new credit card

Should your application be successful, it is important to use your credit card responsibly in order to maintain a good credit rating and avoid unmanageable debt. Your minimum monthly payment agreed with your lender must be paid every month although you also have the option of paying off the full balance each month.

Perhaps the easiest way to manage your payments is to set up a monthly direct debit which will offer you the reassurance that no payments will be missed. Other options include setting up a standing order or contacting your credit card provider directly by phone or online and paying with a debit card each month.

For a more thorough look at types of credit cards, credit score and the application process, please see our guide to credit cards explained.