At a glance: Credit cards mentioned in this article
|Capital One® Secured Mastercard®||Great for building credit|
|Chase Sapphire Preferred® Card||Excellent travel rewards|
|Blue Cash Everyday® Card from American Express||Cash back on everyday expenses|
What should you know before looking at new credit card offers? That depends on a wide variety of factors, but we’ve put together some dos and don’ts to help you choose a credit card and use it responsibly. Just keep in mind that this is general advice and may or may not apply to your individual situation.
How to get a credit card: The dos
Do research cards based on your credit score.
Your approval odds on Credit Karma provide an estimated likelihood that you’ll be approved for a specific credit card, based on how your credit profile compares to other Credit Karma members who have been approved for the specific credit card in the past. Better approval odds don’t guarantee that you’ll get approved for a card, but they can help you focus your search on cards you’re more likely to get.
Do consider choosing a secured credit card to start.
If your credit history is short, or if you’re rebuilding your credit after damaging events like a foreclosure or bankruptcy, a secured credit card, such as the Capital One® Secured Mastercard®, could be a great tool to have. It’s backed by a security deposit you provide, which serves as a buffer against you defaulting on a payment.
Do read reviews.
Credit Karma has thousands of consumer credit card reviews from our members. Find out which cards make customers happy, and which you may want to avoid.
Do consider your spending personality.
Are you a frequent traveler with excellent credit? If so, you might choose a travel rewards card such as the Chase Sapphire Preferred® Card, which offers two points for every dollar spent on travel and dining purchases..
Or maybe you spend more of your money at the grocery store. In that case, consider a rewards card that offers more cash back at U.S. supermarkets, like the Blue Cash Everyday® Card from American Express.
Do read the fine print.
Be sure to know what the terms and conditions are for the credit card you’re interested in before you apply — you don’t want to be caught off guard by any surprises after you get the card.
Do watch your credit utilization rate.
It’s generally recommended to keep your overall credit card utilization under 30 percent. You can figure out your utilization rate by dividing your total credit card balances by your total credit card limits. Lower credit utilization rates suggest to creditors that you can use credit responsibly without relying too heavily on it.
How to get a credit card: The don’ts
Don’t apply for the first credit card offer you see.
Just because a card advertises a low interest rate or a great sign-up bonus, it doesn’t necessarily mean that you’ll qualify for the card or that its other terms will meet your needs. You may want to research other cards before making a decision.
Don’t miss a payment.
Your credit scores will only benefit from your new credit card if you maintain regular on-time payments. Just one missed payment can remain on your credit report for up to seven years and could severely damage your credit. Consider setting up automatic payments or email alerts to remind you when it’s time to pay your credit card bill.
Don’t carry over a balance.
It’s not necessary to carry over a balance from month to month to build your credit health. If you can, pay off all of your credit card balance in full every month to avoid interest payments. If the bill is too large, paying more than your minimum payment can still reduce your accrued interest.
Don’t close your other card accounts.
Qualifying for a new card doesn’t mean you have to or should close your other accounts. In fact, closing your oldest account could significantly shorten your credit history and in turn damage your credit.
Don’t apply for multiple cards at once.
Several hard inquiries over a short period of time can indicate to lenders that you’re desperate for credit and can lower your credit scores. Instead, consider narrowing your focus to one or a couple cards and applying for just one at a time.
Don’t max out your credit cards.
This will cause your utilization rate to jump, potentially lowering your credit scores and making it more difficult to pay off your balances.
By applying these simple tips, you’ll put yourself in a good position to identify the right card for you and use it well. Whoever said being responsible had to be complicated?
Interested in reading more? Check out our article on how to apply for a credit card and get approved.
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