When is the best time to apply for a new credit card?
Applying for a new credit card can be very emotional. For some, it can cause anxiety. For others, it can spark anticipation and excitement.
If you pick the best time to apply for a credit card, it might not be such an emotional roller coaster. The timing of your credit card application can not only reduce some of the anxiety surrounding the process, but potentially improve your chances of being approved.
While there are times of the year when credit card issuers may offer more promotions and bonuses, that shouldn’t be the deciding factor in your decision. The best time to apply for a new credit card is primarily based on your financial situation and personal needs rather than anything else.
Here are some credit card research tips that could improve your chances of getting approved, reduce the impact on your credit score, and in some cases, help you take advantage of great credit card promotions and benefits. urgent.
When is the best time to apply for a credit card?
The first thing to do is to examine your financial situation and your current spending habits. Whether you’re a college student applying for your first credit card or a seasoned travel hacker, this is a good exercise to help identify the best credit card candidates.
Take note of some immediate and long-term financial goals and needs that you have. Could a credit card help? If so, you’ll be looking at cards with features that might support or complement those goals. Read on to explore some common scenarios that could boost your search for a new credit card.
You have a balance on a high interest credit card
Sometimes you may need to transfer an existing balance from a credit card with a higher interest rate to a card with a lower interest rate. If done correctly, this move could help you save money on interest charges.
If you have high interest debt, now is a great time to apply for a new credit card offer an introductory 0 percent APR on balance transfers for 12 months or more. Ideally, you will pay off your balance before the expiration of the introductory APR to avoid paying interest.
It is a good idea to use a balance transfer calculator establish a repayment plan for your balance during your introductory period to the APR,
You are planning a big purchase
If you are planning a big purchase, a new credit card can come in handy for two reasons: you can get a promotional APR to avoid interest on your purchase, and you can earn rewards from a. credit card sign-up bonus.
For example, some card issuers will offer signup or welcome bonuses in the form of cash back, a credit statement, or a certain number of reward points if you meet the conditions for spending on the card in. a specified time. If you know you have a big purchase coming, you can schedule your claim in such a way that a purchase you were going to make anyway could help you meet the spending requirements for a signup bonus.
The most common time to meet these spending requirements is three months after opening your account. If you don’t normally spend $ 3,000 to $ 5,000 (current spending requirements) in such a short period of time, a large purchase could help you qualify so you don’t miss out on your signup bonus.
If you aren’t planning on any major purchases, you can schedule your new credit card application for when you will be shopping the most. For many people, the holiday shopping season is a great time to spend.
You have good (or excellent) credit
If your credit score is around good at excellent (670-850), your chances of getting approved for a new credit card are much better than if you had a poor or fair credit rating (350-669.) If you are confident about your credit score this might be a good time to apply for a new credit card.
As long as you don’t have an urgent need for a credit card right away, it can be beneficial to spend a few months building your credit score. Depending on where you start, improving your credit score could take you from fair to good or from good to excellent, which can eligible for cards you might not have been approved otherwise and help you get a better interest rate.
You want to build your credit profile
If you want build your credit, applying for a new credit card could help in terms of combining credit and establishing a payment history on time. Your payment history represents 35% of your FICO score, while your credit mix represents 10%. Both categories play an important role not only in calculate your credit score but also in the way lenders perceive you in terms of credit risk.
People with little or no credit history can start their credit building journey with a secured credit card or a “starter credit card. “These entry-level cards, when used correctly, could help you get better credit card deals down the road.
You have been pre-approved
A prequalified credit card offer means that you have met the initial criteria for a card issuer for a certain credit card before applying. It is not guaranteed that you will be approved for the card in question, but it is a way to gauge your chances of approval without having a thorough investigation of your credit report.
Applying for a prequalified offer triggers a “soft credit” request and will not affect your credit score. By applying for these offers, your chances of being approved are much better since you have already been selected for the offer.
You have been referred
Some card issuers provide existing card users with a referral link that they can give to friends and family. These referral links don’t necessarily improve your chances of being approved for a new card, but if you do, you (and your referrer) may be eligible for a sponsorship bonus in the form of cash, reward points, or both.
When not to apply for a new card
There are definitely times when you shouldn’t be applying for new credit cards. If you apply for a card at the “wrong” time, you could risk being rejected, being affected by your credit score, or being rejected for other types of credit that you will need later. Here are some examples of when you should avoid applying for a new credit card.
You’re about to get a mortgage or other loan
If you are shopping around for a mortgage, Personal loan or car loan, it is better to avoid applying for a new credit card. Whether or not you are approved, the increased number of inquiries about your credit report could lower your credit score.
A lower credit score coupled with multiple serious inquiries signals lenders that you need credit, potentially making you riskier with credit. In this case, your mortgage or personal loan application could be refused. If approved, you might not get the best deal if your credit score has gone down.
You have recent difficult inquiries
Each credit card application involves a firm credit check, which will lower your credit score. Too many recent inquiries can cause you to decline new credit cards, especially if the inquiries did not result in approval. Instead of continuing to add harder inquiries to your credit, maybe now is the time to hit the pause button on your credit card inquiries. We recommend three to six month wait between new card requests.
If you already have multiple inquiries on your credit report, the good news is that they will only stay on your report for 24 months, and they will stop affecting your credit score after 12 months.
A good practice is to check your credit report for the number of serious claims before applying for new credit cards. Ideally, you should time your new credit card application after the excessive inquiries have been dropped.
Your finances are not in good shape
There are many aspects to your overall financial health. A credit card should improve your financial situation, not put it at risk. If you already have have a lot of debt, are struggling to pay your existing creditors on time or have a lower credit score, a new line of credit may not be a good idea right now.
It may be a good idea to take a step back, assess how you are managing your money, and work on improving your finances as a whole. Once you’re in a better financial position, a new credit card might improve or support your financial goals, not hinder them. Plus, you’re more likely to be approved for a new credit card with a better credit score.
How to choose a credit card
Knowledge how to choose your next credit card will save you time and hits against your credit if you are intentional in your selection and deliberate in your research.
Ideally, you will start by assessing your financial needs and your current lifestyle. This should lead you to analyze the best credit card options for your situation. Some factors to consider include:
After taking stock of your personal financial situation, this might help you create some sort of credit card “wish list”. This process should help you refine some card ideas.
For example, you may be planning an extended trip abroad that requires additional upfront expenses, such as airline tickets and hotel stays. These upcoming needs might lead you to a list of preferred features of the travel card:
- Low or no annual and foreign transaction fees
- A welcome bonus to meet initial spending requirements
- Co-branded for loyalty and travel rewards
- Access to the airport lounge
From there, you can schedule your credit card application to coincide with your travel schedule. If you’re looking for the perfect card but it’s not yet available, you might even decide to plan your trips based on the availability of the credit card.
If you have defined your needs and created your credit card wishlist, consider using Bankrate’s tool, Card match, or consult our credit card notice to help you find the credit card that will work for you.
The bottom line
The best time to apply for a new credit card is the best time for you. We all have financial aspirations and personal goals that could benefit from a great feature-rich credit card. Assessing your specific needs will be the key to finding a card at the right time that is right for you.