Summary: Anyone can qualify for a credit card if you meet the minimum requirements. We discuss each requirement and how it affects your chances of qualifying.
Some people think that the process of getting a credit card is easy and almost automatic. Fill in the application you get in the mail and then they approve you and send you a card.
But in fact, there are things a person needs to fulfill to get that approval, and not everyone has a good enough credit history or proof of income to get it.
There are also other qualifications that need to be met.
To save yourself wasting time applying for something you might not be eligible for, here is an easy guide on how to qualify for a credit card.
1. Meet the Minimum Age Requirement
While legally you can apply for a credit card at the age of 18, when you are considered an adult there is a stipulation.
You will need to have a regular income coming in and be able to prove that.
The income does not have to be from a full-time job so students with part-time jobs could qualify.
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They just have to earn enough to pay their credit card balance which is something the credit card company judges.
If you are 18 to 20 years old, not working and want a credit card, you will have to have another adult apply for a joint card with you.
Another option is to ask a family member or friend to add you to their credit card as an authorized user.
2. You Will Need an Income
You need to have a wage coming in.
A credit card company needs to know any person with a card will pay off their debt each month. In some cases, applicants who are older than 21 can use a partner's income if they have access to that income.
This means having a shared account or transfers that move money regularly from their account to yours.
This income rules makes a lot of sense, especially if someone is married and staying home with the children, it allows the spouse that is at home to access credit basic on the family income.
If you are looking to get a high limit on your credit card you need to show that you earn an income high enough to pay that.
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3. Have a Good Credit Score
In today's world when you want a mortgage loan, a credit card, or a personal loan, they check your credit score to see if you have a positive credit history.
People who have low scores, meaning a bad history are unlikely to be approved for a traditional unsecured credit card.
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Some are very tough and will only issue cards to those with only excellent credit reports.
Some might issue a card as long as the bad history is older than 2 years.
If sometime in the past you had a card with that provider but got into trouble and as a result, you have a bad history with them, you are not likely to get their approval for a new one.
If you cannot qualify for a traditional credit card, you can apply for a secured credit card which are guaranteed approval when you make a deposit.
4. Low Outstanding Debt
Before anyone's application gets approved the credit card company will look at your debt to income ratio. That includes other credit cards, loans, and so on.
If they judge that you are already using a lot of credit and do not think you should have any more they will not approve you a card. They may also look at your income, then your debt and consider your debt to income ratio.
If your DTI is too high it could mean you may not be able to afford a new credit card.
What Can You Do to Improve Your Chances?
1. Have a co-signer with a better credit history than you.
If for some reason you cannot get a credit card, maybe you are not earning enough, you have a bad credit history, or you are not old enough, there is a chance you can still get one but you need a co-signer.
This means you have a family member or friend co-sign the application. If they meet the requirements you could both then get approval.
But there is risk involved for your co-signer.
If you run up the bills and do not pay the debt back, they will be responsible for it all and can take a hit to their credit score, too.
When dealing with a Secured Credit Card you get to choose your own credit limit, you should start with a good amount.
2. Opt for a Secured Credit Card Instead
Another avenue you can take if you cannot get a credit card the usual way is to look at secured credit cards.
This means you save up a deposit, then apply for a secured credit card and send them the deposit they ask for. All uses of the card are then against the deposit you sent.
After a certain amount of time when you have proven you will make your payments you might then qualify for an unsecured card.
That is as long as you have not damaged your credit report in any other way.
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Taking out a credit card should not be something taken lightly.
While there is a lot of use and convenience in having one, you need to be able to make regular payments each month.
People overspending on credit cards is a big problem and a lot of the debt people are in is from credit cards they have run-up.
Make sure you are ready for the responsibility.
Mohit Jain is the owner of WhiteLinksSEO, a SEO firm that works with SEO firms in the US helping them manage their backend SEO. He also writes on finance topics as part of his content marketing efforts for Century Jewelers & Loans. If you a looking for a quick loan or need cash during this CoronaVirus pandemic outbreak then head straight to their pawn shop in Freehold and avail a loan.