Apply for a Credit Card

What You Should Know When You Apply for a Credit Card

Credit Card applications have become an easy business, almost no actions are required on your part, the bank or credit company helps you all along the way.

First of all you should know that applying for credit cards may be very different in different countries, although if you opt for known cards like, the AmEx Blue or something of that stature you will likely have the same conditions. Usual eligibility conditions are being over 18, having an average income of at least a specific amount for the past three months. In additions the banks may ask you if you pay mortgage, may have a look at your credit report and if they see something they don't like they might not give you a card, or may adjust your spending limit accordingly. Let's take a look at the application more closely and how it usually works

Personal Information

This is not really a big deal. You have to, of course, state you name, date of birth, social security number, address and possibly phone number. These are very basic details that every card company will ask for.

Working Information

The credit card company will most probably ask you where you work, and more importantly, what your income is. In many countries they ask for a written document about your work, and status. If you work for the government, or for large multinational corporations you may be dealt with better, in terms of conditions. Although this mainly applies to loans, it may apply to some credit cards too.

Amount of Credit

The amount of credit you have depends on two things. The credit card itself usually has a limit, that is given to be between two numbers. Based on your monthly income they will provide you with information weather you can select your card of choice, or they will give you a list of what cards you can apply for. When that is done the bank will determine your maximum credit, within the limits of the card.

The actual method behind this is different for each bank. They look at what kind of job you have, what your income is, your credit report, and so on. In essence, the safer "investment" you are, the more they will give to you, the more lenient they will become.

Costs

When applying for a credit card you should always be aware of what this costs you. The costs can be split up into two categories, fixed costs and variable costs, depending on how you spend.

A fixed cost is the annual cost of the card for example, but different companies may have other constructions that have fixed costs built in. A variable cost is actually the APR of the card. Of course the actual sum won't be different if you spent $100 and $2000, but the rate is the same. You should always take this into consideration, if you are short on money you can very easily get into a dept-spiral with a credit card.

Also look at your local banks. I have a Blue from American Express and where I live there is an annual fee, but if you apply in America there isn't. They told me this up front, it's not a scam, you just have to get the necessary information before you get a card. Happy spending!

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