Home Education Centre Credit Card Basics How to Apply for a Credit Card

How to Apply for a Credit Card

Many people argue that you need a credit card in order to thrive financially these days. Credit cards make payment convenient, and they provide you with a certain amount of fraud protection. Additionally, credit cards offer the fastest way for you to build your credit history. When you apply for a car loan or a home loan, having a good credit history can mean the difference between acceptance and rejection – and save you money in interest charges.

Applying for a Credit Card

Applying for a credit card is fairly straightforward, but there are still some things you need to know. As you apply for your Canadian credit card, here are some of the things you will need:

  • Full Legal Name
  • Current & Previous Address
  • Identification Number
  • Employment Details
  • Income Information

Make sure you have the identification you need. If you go into a bank to apply for a credit card, you might need to show documents. If applying online, though, you can usually just enter the information into the fields shown. In most cases, you can know almost instantly whether or not you have been approved. A computer runs a complex algorithm that takes into account the information you provide, and uses your identifying information to find your credit report. Using the mathematical formula, your application is either approved or denied. Additionally, your credit limit is decided almost instantly as well.

Actual Credit Card Terms

Many applicants are disappointed when they don’t receive the advertised terms. It is important to remember that credit card issuers advertise the terms available to those with the best credit risk profile. This means that you may not get the best interest rate advertised, or the credit limit that is advertised.

Even if you are “pre-approved” for a certain amount, that is no guarantee that you will get the credit card terms advertised. Only after your credit report is analyzed, and after the statistical model accounts for your current situation, will a final offer be made. Be aware of this as you apply for a credit card.

Other Considerations as You Apply for a Canadian Credit Card

As you apply for your credit card, it is important to keep a few things in mind. First of all, you might be denied credit. Even when you have a “pre-screened” offer, it is possible that you will be rejected by the credit issuer. If something changes in your credit profile, or if you don’t have as a high an income as expected, your application could be rejected.

You should also realize that excessively applying for many credit cards in a short amount of time can affect your credit score. Hard inquiries like that can ding your score, and make it harder to get approved for your next loan. Before you apply for a credit card, consider this reality. Also, check your own credit rating. If you have fair to poor credit, you might not qualify for some cards. Applying for them would damage your credit score further – while resulting in rejection. If you don’t have good or excellent credit, you might be limited in your options. Make sure you apply for a card that fits your credit profile. When you compare credit card offers, look for information about the credit requirements on the application.

Even though we are used thinking of credit cards as easy to get, you do need to realize that certain factors will be considered when you apply – and that you could be denied.