How To Get a Credit Card

Takeaways: How To Choose and Apply for a Credit Card

• At a minimum, credit card issuers generally verify your age (18 or older), taxpayer ID, identity, address and ability to repay, according to federal law. Other requirements, such as credit score and income thresholds, vary by issuer and card.
• Choosing a card should start with a clear goal, whether that's building credit, earning rewards, financing a purchase or consolidating debt.
• Before applying, check your credit reports and score, understand your utilization and gather key information like your Social Security number, income and address history.
• Applying for only one well-matched card limits hard inquiries, which can temporarily lower your score and stay on file for about two years.

Whether you're researching your first or fifth credit card, start with a clear goal. Credit cards can make purchases convenient, help you build credit and some even offer special benefits, but they can also lead to unnecessary debt or spending if you don't use them carefully.

Here's our introduction to how — and why — to get a credit card.

What You Need To Qualify for a Credit Card

Credit card issuers generally verify two key, legally required things: That you can confirm your identity, and that you have the ability to repay the card balance.

To meet those requirements, you'll generally need:

• To be 18 years old: You must be a legal adult to hold a credit card in your own name. There's no upper age limit, as denying a card for being too old is illegal.
• A taxpayer ID: A Social Security number or individual taxpayer identification number is used to verify your identity and check your credit.
• A verifiable identity and U.S. address: Your name, date of birth and address must match official records well enough to pass verification.
• Income you can use to repay the card: By law, an issuer must consider your ability to make the minimum payments based on your income or assets and current obligations.

If you're under 21, the Credit Card Accountability Responsibility and Disclosure Act (Credit CARD Act) generally requires you to show your own independent income or have a qualified co-signer.

Almost everything stricter than this (such as a particular credit score or a minimum income figure) is an individual issuer's policy for a specific card.

Before You Apply: Set Goals and Choose a Credit Card

Not all credit cards are created equal. They can have different terms and conditions, application requirements and benefits, so it's important to know why you want a credit card and what you want it to do for you before you start applying for one.

“The best card really depends on the person,” said Stacey B., BECU's lead financial educator. “Your budget, credit situation and whether you will pay the balance in full every month are all factors that will determine whether a card will help you or prevent you from achieving your financial goals.”

If you're researching how to get your first credit card, you might be weighing perks like rewards or points. But those benefits won't keep you financially fit if you don't have a budget and have little or no credit.

“Think of a credit card as a tool for building credit, not for buying stuff you can't afford,” Stacey said, particularly for a first card. “Someday you may want a house or other big-ticket items, and a credit card is a common starting point for building the credit you'll need to get approved for future loans.”

She suggested asking yourself, ‘Am I getting this card because I want to buy stuff, or because it will help me build credit?' “You want to be in that second headspace,” she said.

Once you understand your “why” for getting a credit card, then you can start thinking about choosing the right card to meet your needs, said Jeffrey K., BECU's director of product management for credit cards.

“Many younger people want rewards for spending,” he said. “If you have a solid budget and can pay off your balance each month, that's where a cash-back card might come into play. If you have a big purchase coming up or you want to consolidate debt, a low-rate card or a card with an introductory 0% APR could be a good match.”

Where To Apply for a Credit Card

Depending on the financial institution, applying at a bank or credit union where you already have an account may weigh slightly in your favor, though your credit report and income remain the main factors.

Credit unions are especially worth a look. They're member-owned, so they tend to pass savings back as competitive rates and few fees. Many also offer low-rate, starter or secured options for building credit. The one requirement is membership, usually easy to meet through where you live, work or study — or with a small one-time deposit.

A new financial institution opens up the widest range of cards and rewards offers, but with no relationship to lean on, the decision rests almost entirely on your credit file.

Whichever route you choose, prequalification or “see if you're approved” tools can help gauge your odds before any formal application and some suggest which cards you might be more likely to get.

Credit Card Application Process

Applying for a credit card can be faster than many people expect. It can often be a five-minute form and a decision in seconds. But the work that makes an application succeed happens before you ever fill anything out.

1. Pull Your Free Credit Reports

Before applying, look at what lenders will see. All three major credit bureaus — Equifax, Experian and TransUnion — offer free credit reports at the official site, AnnualCreditReport.com. Use the report to confirm everything is accurate and dispute any errors before you apply. A general guideline is to use less than 30% of your total credit available.

2. Look Up Your Credit Score

The free reports above show your credit history. Your FICO credit score — a three-digit number (commonly on a 300–850 scale) that lenders use — is separate. You can see your score for free through many financial institutions, like BECU, or card issuers.

Applying for a card that you know is well above your tier can lead to a denial and an avoidable hard inquiry to your credit. Scores fall into these tiers:

• Poor (300–579): Approvals are limited, mostly to secured or credit-builder cards.
• Fair (580–669): Some starter and basic rewards cards are within reach.
• Good (670–739): Most mainstream rewards cards become available.
• Very Good (740–799): You'll qualify for strong rewards cards at the better APRs.
• Exceptional (800–850): Nearly everything, including premium cards, is open to you.

If you have little or no credit, you might need to pause your pursuit of a credit card while you take steps to raise your credit score.

3. Understand Current Utilization

Your credit limit is the ceiling on what you can charge. It matters more than spending power, because of a metric called credit utilization — the percentage of your available credit you're using at any time.

If you have a $10,000 limit and a $3,000 balance, your utilization is 30%. This is one of the biggest factors in your score, and keeping it low signals that you're not overextended.

4. Gather Documents

Applications are quick partly because they ask for standard information. Have these ready:

• Your full legal name, date of birth and Social Security number (or individual tax identification number).
• A current home address and how long you've lived there.
• Your annual income and employment status.
• A working email and phone number for verification.

5. Apply Online

One caution: Don't just start applying everywhere.

“Your credit gets dinged every time you apply, so do your research ahead of time,” Stacey said. “Maybe narrow it down to your top three choices, then apply only for your top pick and see what happens. Don't keep applying.”

On the credit card's official application page, enter your personal and financial details, review the terms (the APR, fees and the cardholder agreement), and submit. Many issuers run an instant decision and approve you on the spot, sometimes giving you a card number you can use online right away while the physical card ships.

Apply directly on the issuer's own website and have your documents in front of you.

Watch the fields that commonly trip people up:

• Name: Use your full legal name exactly as it appears on official records, not a nickname.
• Address: Enter your current address; a mismatch with your credit file can stall verification.
• Social Security number: A single transposed digit is one of the most common causes of an instant rejection.

6. Wait for Approval

The lender will review your documents and perform a hard inquiry, which happens when a lender pulls your full report to make a decision. A hard inquiry can lower your score by a few points and stays on your report for about two years, with the impact decreasing over time.

If you're denied, wait for the letter that tells you which credit report was used to make the decision, Stacey said. (You'll read more about that in a minute.)

What Happens Next With Your Credit Card Application

After you apply, the issuer will review your application and notify you of one of several possible outcomes.

Card Approval

If you're approved instantly, that comes from an automated system that decides in seconds when everything on your application lines up cleanly.

You'll also learn your credit limit. Issuers weigh your credit score, your reported income, your existing debts and their own internal policies to decide your initial credit limit.

How fast your physical card arrives depends on the issuer, typically a few days to a few weeks.

The most important next step is to pay your bill on time, every time. Pay the full statement balance by the due date to stay within the card's grace period and pay no interest on purchases at all. By avoiding interest charges, your rewards retain their full value.

Pending

If you don't get an instant yes or no, you'll usually see a message like "your application is being reviewed" or "we'll let you know within seven to 10 days." Your application gets pulled out of the fast approval lane when something needs a human or a second check. The usual reasons include:

• Identity verification: Something didn't perfectly match your credit file, such as an old address or a recently changed phone number, so the issuer will confirm you're really you before proceeding.
• A borderline credit decision: Your profile is close to the line, so a reviewer looks at the full picture.
• Income or document checks: The issuer may want to verify the income you reported, especially for a higher requested credit limit.

Under federal law, an issuer generally must notify you of a decision within 30 days of receiving a completed application.

You can check the status online or call the issuer's application-status line. Issuers often reach out by phone, email or mail during a review. Responding quickly is the single fastest way to get unstuck. A polite call where you clarify your income, explain a recent inquiry or confirm your identity can sometimes move a "maybe" to a "yes."

Don't reapply, as submitting a second application adds another hard inquiry and can make you look riskier.

Denial

“For people just starting out who don't have credit or much credit history, it can feel disappointing if you can't get a card,” Stacey said.

When an application is denied, federal law entitles you to a written explanation, called an adverse action notice, telling you the main reasons. The issuer usually sends it automatically within a week or two.

It also entitles you to a free copy of the credit report used in the decision, so you can see exactly what the lender saw.

Use the reasons in that notice as a to-do list. Common fixes include:

• Paying down balances to lower your utilization.
• Making every payment on time going forward.
• Disputing any errors you find on your report.
• Letting your accounts age.

If you have thin or damaged credit, a secured credit card may be a good option. It requires a refundable cash deposit up front, and that deposit typically becomes your credit limit. You then use the card like any other, and the deposit comes back to you when you upgrade or close the account in good standing.

A faster route, if it's available to you, is to be added as an authorized user on the account of someone you trust with strong credit, often a parent or partner. Their account's positive history can appear on your credit file, helping you build a record without applying for anything yourself.

FAQs About Getting a Credit Card

How can I use my new credit card to build credit?

Pay your credit card on time, every single time. Payment history makes up 35% of your credit score. Automatic monthly payments to at least the minimum due can ensure the minimum is paid on time.

Next, keep your card balance low and don't use more than 30% of the credit available to you. The lower you keep it, the more it helps your credit.

Finally, pay it off in full every month if you can to avoid paying interest. You don't have to carry a balance from month to month to build credit. Use the card for something small, maybe a streaming subscription, and make sure to pay it off.

When I get a new credit card, should I close the old one?

No, don't automatically close an older card's account. Each credit card you hold builds a record of payments and contributes to the credit available to you.

Closing a credit card can lower your credit score, especially if it decreases your available credit, causing your credit utilization to go up.

The one exception might be if the card carries an annual fee.

“You really have to look at the big picture, including what the card costs, what benefits it offers, how much available credit you have and whether you're planning to apply for more credit soon,” Stacey said. “Credit status can also affect other costs, like auto or homeowners' insurance in some states, so the answer will depend on your situation.”

The credit limit I was offered was low. How can I get a higher credit limit?

Newer borrowers and lower scores generally get lower starting limits, while established credit and higher income get more. If your first limit feels low, that's normal. It usually grows over time with responsible use. After several months of on-time payments, you can ask for a higher credit limit, which, used responsibly, lowers your utilization and can help your score. You can request it through your online account, the mobile app or by phone.

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