Whether you are applying for your first credit card, making a large purchase or wanting to add another card to your wallet, knowing when to apply for a credit card is important. Plus, one must be eligible to apply for a credit card where approval is subject to the card issuer evaluating your creditworthiness.
Let’s look at some occasions when applying for a credit card may make sense.
You want to build credit
Getting a credit card can often be a solid first step to building your credit.
While getting a credit card can be a good place to start, using your available credit – and managing your other types of debt – responsibly is always key. That’s because paying your credit card bills on time, staying below your credit limit and having a lengthy credit history are factors that contribute to your creditworthiness.
You’re planning a big purchase
Applying for and getting approved for a credit card before making a big purchase may help you save on interest.
Some new credit cards have a low introductory APR period on purchases. If you make a large purchase and pay it off during the introductory period, you could pay little or no interest on that purchase as long as you pay your statement balance in full by the due date each month.
To transfer high-interest debt
High-interest debt can quickly become hard to manage. If you’re struggling with high interest rates or making multiple monthly card payments, consider consolidating your credit card debt.
A card with a low introductory APR offer on balance transfers can give you some time to pay off existing debt. The promotional low APR lasts for a set period, after which you’ll be charged the regular purchase APR on any remaining transferred balance. Keep in mind that the card will come with a balance transfer limit and that balance transfers are not free – the balance transfer fee is typically a percentage of the balance transfer or a flat rate, whichever is higher. If you don’t make the required minimum payments, you may lose the promotional APR.
You're pre-selected or pre-qualified for a credit card
If you’re pre-qualified for a credit card offer, the issuer has determined you meet some eligibility criteria for that credit card.
Though this is not a guarantee that you’ll be approved for the credit card, it’s a sign in your favor. If you’ve been thinking about getting a credit card, check your mail for these offers to see what cards may be available to you. If you are actively looking for a new credit card, you can also use Citi's website to see if you're pre-qualifed for a card.
