How to Apply for a Credit Card

Whether you just turned 18 and are finally able to establish credit on your own, or are a little older than that and never got around to applying for a credit card, doing so for the first time can be a little intimidating. It may seem like all you have to do is fill out an application and hope for an approval, but there is more to the application process than that. In fact, the steps below may not just educate you on how to apply for a credit card, but they might just increase your chances for approval, too.

Have a steady income

It's not easy to get that first credit card approval and it's almost impossible if you're unemployed - especially if you are under the age of 21. Before you apply, get yourself a part-time or full-time job; lenders want to know that you'll be able to pay back the money you borrow before they approve you for a card.

Get your finances in order

Once you have your employment lined up, make sure your financial history is tidy. It's too late to fix the past if you missed a payment, but if your recent financial behavior is good it will reflect positively in your credit score and improve your chances of getting approved. Make sure all of your debts, personal loans, student loans, car, etc. are current as they call affect your credit score.

Know where to look

It may seem like everywhere you turn there's another place where you can apply for a credit card, whether it's a TV commercial, online ad or in your mailbox. Don't get overwhelmed though; there are a handful of places that you might have a good shot at getting your first credit card. If you're in school, a lot of the major credit card issuers have a student credit card. Just be wary of this as some student cards have high interest rates and annual fees. Read the fine print!

You can also talk with your bank about applying for its credit card. If you have a previous history with your bank with a checking or savings account, your approval chances are that much better; especially if your account has never been overdrawn. You can apply for a credit card with your bank online or in-person.

For credit building purposes, you could also look into getting a department store credit card. It's a little easier to get approved for this type of credit card, but unfortunately the often have high interest rates, so it would be expensive to carry a balance. On the bright side, you can use a card like this to build up a credit history that will help you when you apply for a major credit card a few months down the line.

You could also increase your odds by applying for a secured credit card. It's a little easier to qualify for a secured card because you'll have to put down a deposit, which is a safety net for the lender in case you were to default on the account.

Keep an eye out for credit cards that offer limited credit, too. Some cards are geared towards the applicant's credit history, so applying for one that doesn't require excellent credit might be your best bet for getting approved.

Don't play the numbers game

We know, you want that credit card so bad and if you're probably thinking the more applications you send out, the better chance you will land an approval, right? It may make sense on paper, but in reality sending out multiple applications in a short time frame can affect your credit score. You see, every time you apply for credit lenders are reviewing your credit and every time that happens your credit score may drop. Part of the reason for that is lenders look at your activity as you are seeking more credit, which gives them pause. Instead, apply for cards one at a time.

Keep your credit utilization ratio down

If you already have a credit card, but are looking for another, this is a key tip for you. Lenders not only want to see that you're responsible with your credit cards, but also that you're not over utilizing them. The way to prove that is by keeping your credit utilization ratio at 30% or below. For example, if you had a card with a $10,000 limit, you'd want a balance of $3,000 or less.

So when you apply for another card, keep that ratio in mind. You won't want to have picked up a lot of recent debt on an existing card; an ideal time to apply would be after you've paid off your card.

Ask for someone to co-sign with you

You want to get a credit card on your own, but as previously mentioned it can be tough if you don't have much of a credit history to get that first card. If you find yourself running into issues because of a lack of credit, you could reach out to a parent and see if he or she would co-sign with you for a card. The main thing here is you must be responsible with the card because any missteps would hurt the co-signer's credit, too. Set up some sort of agreement that states you make payments on time every month and perhaps close the account once you're able to get a credit card on your own.

Learn from rejection

As you build up your finances and credit history, your first few credit card applications may not go the way you'd like. Don't let it get you down though; even people who've been working for years and have a long credit history get turned away sometimes. In the event that a lender does say, no, you'll receive a letter that will explain why your application was denied. Use this information to help you plan for the next time you apply for a credit card. It could be as simple as applying for a different type of card.