Credit Card Applications: How to increase the odds of acceptance
Federal Reserve statistics say that almost 21% of applications for a credit card are rejected. In my experience, nobody likes rejection, whether it's asking someone out on a date, interviewing for a job, or requesting help from someone. It's because of the false belief that when your application is denied, you're the one rejected. It's not true, though; don't get sad because an application was denied – simply strategize and go again. Here are certain things to include in your strategy; if it has to do with getting a credit card.
Figure out your current standing
Credit card lenders review your credit score and credit report to scrutinize your application. Mortgage loans are usually examined from the three main credit bureaus (Equifax, TransUnion, and Experian), but credit card applications care about your credit report and score alone. Unfortunately, you won't always know which of the three reports will be checked, so it's better to review the three credit reports and your credit score before you apply.
Gauge yourself and improve your credit score
The action you need to take would differ based on the situation, but the following pointers should help direct you:
- Pay off your credit card balances.
- Check and resolve errors in your credit reports. There could be mistakes in them.
- Avoid late payments
- Become an Authorized user of any well-managed credit card you are added to.
Get what works for you
Look for credit cards that are tailored to your needs. By impulse, you may be looking for the one that fits your spending style. However, pay attention to the ones that match your credit score range. If you have a fair credit score, applying for premium rewards cards is a waste. As you work towards getting a better score, use one that is tailored towards your needs.
Your income capacity
Apart from your credit history and score, the card issuer will also look through the details about your income. The point of a credit card history is to show the issuer that you will likely pay your credit obligations; however, it takes your current income and earning power to show that you are capable of making the payments – not just likely. Include your household income on your credit card application if you have access to them. Funds from sources like investment income, child support, alimony, disability benefits, etc., can be added too.
Request a reconsideration
Even when your application is denied, you can request a reconsideration. Most issuers have a line you can call to do this. Your approach should be to ask for more information and plead your case. If you have a solid argument, they can allow it, but even if they don't, ask for the reason and fix it – then reapply.
Reasons your applications could be denied
- There is a credit freeze, and the issuer is unable to access your credit report.
- You already got a welcome offer from the issuer in the past and are ineligible for a new one.
- You have too many credit card inquiries on your credit report, especially if they are recent.
- You opened too many credit cards that are new in a short while.
Once you identify why your application, you can know how to defend yourself and change their mind, however, no one is obligated to reconsider your application, so do not be rude – politeness can make the difference.
The Best Pre-Approved
Credit Card Offers
If you have received a pre-approved credit card offer in the mail make sure you read everything. There are good and bad offers and you need to know which credit card offer is for you.
Look for:
* The Annual Percentage Rate (APR). If the interest rate is variable, how is it determined and when can it change?
* The periodic rate. This is the interest rate used to figure the finance charge on your balance each billing period.
* The annual fee. While some cards have no annual fee, others expect you to pay an amount each year for being a cardholder.
* The grace period. This is the number of days you have to pay your bill before finance charges start. Without this period, you may have to pay interest from the date you use your card or when the purchase is posted to your account.
* The finance charges. Most lenders calculate finance charges using an average daily account balance, which is the average of what you owed each day in the billing cycle. Look for offers that use an adjusted balance, which subtracts your monthly payment from your beginning balance. This method usually has the lowest finance charges. Stay away from offers that use the previous balance in calculating what you owe; this method has the highest finance charge. Also don't forget to check if there is a minimum finance charge.
* Other fees. Ask about special fees when you get a cash advance, make a late payment, or go over your credit limit. Some companies charge a monthly fee regardless of whether you use your card.
The Fair Credit and Charge Card Disclosure Act require credit and charge card issuers to include this information on credit applications. The Federal Reserve Board provides a free brochure on choosing a credit card and a guide to credit protection laws at their web site.
Comparing Cards
* Bank Rate web site provides free credit card tips and information.
* Consumer Action web site has a site that features credit card surveys of interest rates, fees and other terms from dozens of credit cards, as well as free brochures and guides on choosing and using credit cards.
* Card Web lists credit cards and offers e-mail newsletters, frequently asked questions and online credit card calculators.
* Card Ratings lists and reviews credit cards, and offers tips and credit card calculators.
Lost and Stolen Credit Cards
Immediately call the card issuer when you suspect a credit or charge card has been lost or stolen. Many companies have toll-free numbers and 24-hour service to deal with such emergencies.
By federal law, once you report the loss or theft of a card, you have no further responsibility for unauthorized charges. In any event, your maximum liability under federal law is $50 per card.
Complaints
To complain about a problem with your credit card company, call the company first and try to resolve the problem. If you fail to resolve the issue, ask for the name, address and phone number of its regulatory agency.
If the word national appears in the name or the letters N.A. appear after the name, the Office of the Comptroller oversees its operations.
To complain about a credit bureau, department store or other FDIC-insured financial institution, write to the Consumer Response Center.
NOTE: This Site is for general informational purposes. These articles are submitted by independent writers, and we disclaim all liability. It is not a substitute for actual legal, investment or professional advice from a licensed competent individual in their field of expertise.
The information and articles offered on this Site are provided with the understanding that the Fast Loan Cash website is not engaged in rendering legal or other professional services or advice. Your use of the Site is subject to the additional disclaimers and caveats that may appear throughout this website.
The use of our website and all other materials is at the sole discretion of the reader. We believe that the facts presented are accurate. We disclaim any liabilities from the application of the information contained within, and all information is not intended to serve as legal or financial advice.
We also post various affiliate offers on our website that are put together by other companies, and not offered by us. The visitor to this website agrees that we are not liable for any and all damages claimed by any one person as a result of any information or materials contained therein for any reason including, but not limited to errors and/or omissions.
Visa Vs MasterCard:
Which Is The Best?
The two leading credit card companies in the world today are the competitors Visa and MasterCard. They both operate along very similar lines. While Visa can claim to have almost a billion cards issued, MasterCard has over twenty five thousand banks issuing its cards and it is difficult to find any difference in the number of locations worldwide that accept the cards, which is now estimated at over twenty million.
In fact, as far as most consumers are concerned, there is no real difference between the two. They are both very widely accepted in over one hundred and fifty countries and it is very rare to find a location that will accept one but not the other.
However, neither Visa nor MasterCard actually issue any credit cards themselves. They are both simply methods of payment. They rely on banks in various countries to issue credit cards that utilise these payment methods. Therefore, the interest rates, rewards, annual fees, and all other charges are issued by your bank and when you pay your bill you are paying it to the bank or institution that issued your card and not Visa or MasterCard.
How Visa and MasterCard make their money is by charging the retailer for using their payment method. So the truth of the matter is that a Visa issued by say the Bank of Scotland will have very little to do with a Visa issued by other banks and may in fact by more similar to the Bank of Scotland’s MasterCard.
What this means for the vast majority of customers is that you do not have to overly concern yourself with whether a credit card is MasterCard or Visa. You would be better off concentrating on the interest and other charges on the card, the balance transfer possibilities or their reward scheme. You are very unlikely to ever be effected by the fact that it is one and not the other.
If you prefer, if you are going to have two credit cards, you may decide that you want one of them to be Visa and the other MasterCard, this means that if something drastic were to happen to one company, or if you were in the unlikely position of finding a location that accepts one but not the other, then you would have the option of paying with either.
At the end of the day however, much more depends on the bank that gave you the card, than on the type of card it is.
NOTE: This Site is for general informational purposes. These articles are submitted by independent writers, and we disclaim all liability. It is not a substitute for actual legal, investment or professional advice from a licensed competent individual in their field of expertise.
The information and articles offered on this Site are provided with the understanding that the Fast Loan Cash website is not engaged in rendering legal or other professional services or advice. Your use of the Site is subject to the additional disclaimers and caveats that may appear throughout this website.
The use of our website and all other materials is at the sole discretion of the reader. We believe that the facts presented are accurate. We disclaim any liabilities from the application of the information contained within, and all information is not intended to serve as legal or financial advice.
We also post various affiliate offers on our website that are put together by other companies, and not offered by us. The visitor to this website agrees that we are not liable for any and all damages claimed by any one person as a result of any information or materials contained therein for any reason including, but not limited to errors and/or omissions.