Key takeaways

  • Getting the right credit card starts with knowing your credit score, which can help you narrow down options you're most likely to be approved for.
  • Understanding credit card terms and what you're looking to get out of a card can further help you compare and decide on a specific card.
  • If you're still not sure, look to cards that offer preapproval, which can help you understand your approval odds without a hit to your credit score.

Keeping a credit card in your wallet can be helpful for a number of reasons. Credit cards are safer to use than debit cards or cash, and they’re one of the easiest ways to build credit. The best credit cards also come with benefits like the chance to earn rewards on everyday purchases, such as groceries or travel.

But when choosing the right credit card for your spending habits, you might not know where to start, especially if you’ve been denied a credit card before. Although the Federal Reserve has been keeping interest rates steady for months and is hinting at lower rates in 2024, many Americans are still recovering from the crunch when the Fed first began hiking interest rates in March of 2022. The Fed’s series of rate hikes had brought on record highs that impacted all areas of borrowing, including credit cards.

According to a Bankrate survey on credit denials, 50 percent of Americans have applied for a new loan or financial product since the Fed started raising rates, with 32 percent of those people applying for new credit cards specifically. About 19 percent of those who applied for new credit cards were denied, making those who apply for credit cards the most likely group to be denied out of all other loan and financial products.

If a credit card application of yours has recently been denied, there are steps you can take to improve your odds of getting approved on your next application, regardless of what the Fed decides to do with their rates.

Here’s what to know about the information a card company or issuer will want from you when you apply for a card, as well as how to best position yourself for card approval:

1. Know your credit score and what it means

Your credit score is a three-digit number representing your credit health that issuers use to determine your creditworthiness or how likely you are to repay a loan. It’s important to know your credit score before you submit a credit card application. That’s because while a good credit score can open up the strongest rates and lowest fees, a poor credit score can result in a credit card issuer denying you for a card— in fact, it’s much more likely to happen the lower your credit score is.

Seventy-three percent of those with poor credit who have applied for a loan or financial product since March of 2022 have been denied, while only 29 percent of those who have applied with excellent credit have been denied, according to Bankrate’s credit denial survey. This statistic applies to more lending products than just credit cards, but still shows the importance of applying when your credit score is at its best.

How to get a copy of your credit report and credit score

You can request a free copy of your credit report every 12 months from each of the three major credit reporting bureaus — Equifax, Experian and TransUnion — but your credit report likely won’t include your actual credit score. While these two tools are easy to mix up, you can think of your credit score as a “grade” and your credit report as the record of activity that went into that grade.

Instead, you can access your credit score for free through many financial institutions. Start with your current bank or credit card issuer. Many major issuers allow you to monitor and track your credit score through an online account or app, such as Capital One’s CreditWise, Chase’s Credit Journey or American Express’s MyCredit Guide. In some cases, you may not need to be a current customer to use the tools.

Knowing your credit score helps you to apply only for cards with credit score requirements you can reasonably meet. For example, if you have a poor credit score, then you don’t want to apply for a card that requires a good to excellent score — instead, you’d want to focus on cards designed for those with bad credit.

Credit scoring systems: FICO vs. VantageScore

The two most popular credit scoring systems are FICO and VantageScore. Each provides scores ranging from 300 to 850, with higher scores indicating stronger credit, though you’ll find differences in how they calculate these scores, and even how financial institutions use them.

    • Excellent: 800 to 850
    • Very good: 740 to 799
    • Good: 670 to 739
    • Fair: 580 to 669
    • Poor: 300 to 579
    • Excellent: 781 to 850
    • Good: 661 to 780
    • Fair: 601 to 660
    • Poor: 500 to 600
    • Very poor: 300 to 499

What to do if you don’t have a credit score

If you’re just starting with credit and don’t yet have a strong credit history, that doesn’t necessarily mean you can’t get a credit card. To position yourself for approval success, look for a credit card that requires no credit history, such as a secured credit card. These cards help you build up your credit score so you can apply for better cards in the future.

If you can work your way up to a score in the good to excellent credit range, you’ll have better options to choose from — like rewards cards that allow you to earn cash back, points or miles on everyday purchases that you can put toward future travel or statement credits.

2. Compare cards against your financial needs

Once you know what cards you might qualify for based on your credit score, it’s time to think about what your needs are for a credit card. Are you looking to earn cash back or travel rewards? Or maybe building credit first is your highest priority? You can find a credit card to fit your specific needs, budget and spending habits.

What to consider when choosing a credit card

Each card also comes with different interest rates, fees, offers, benefits and terms. Here are questions to ask yourself as you’re comparing credit cards:

  • Do you mind paying an annual fee? If a card you’re interested in comes with an annual fee, think about whether the annual fee is worth it. For example, many rewards cards require an annual fee that can vary from $95 to over $600 a year. Will you be able to earn enough rewards on your card to offset the fee?
  • Do you plan to carry a balance? While paying off your card each month is ideal, if you plan to carry a balance, the interest rate on your card will greatly affect your monthly payments. Look for cards with a low interest rate or cards that offer a 0 percent intro APR for a limited period, such as 12 to 21 months.
  • Do you want to earn rewards? If you have good to excellent credit, you’re likely eligible for one of the best rewards cards on the market offering cash back, points or miles on qualifying purchases. You could earn rewards on everyday purchases at grocery storesgas stations, restaurants and more, plus a flat rewards rate on all other purchases. Many of these cards also offer sign-up bonuses for new cardholders, earning you cash back or rewards after hitting a minimum spending requirement within a specific time period.

3. Learn about credit card terms

You’ll bump into many credit card terms when applying for a card, and it’s a good idea to understand what they mean before you apply. These are the most common credit card terms you’ll see and what they mean:

  • Some cards charge an annual fee for the use of the card and its benefits. For cards designed for those with good to excellent credit, the annual fee may unlock luxury perks, like rewards and travel bonuses. You’ll also see fees on cards designed for those with low or no credit, which pay for the convenience of helping you to build or rebuild your credit (though you can find bad-credit cards with no or low fees too).
  • interest that’s applied to your credit account during a billing cycle. You’ll generally pay this interest if you carry a balance or pay a bill late. Credit card APRs are often variable, which means they cover a specific rate range (for example, 15.99 percent to 22.99 percent) and are partially determined by the prime rate.

    Types of APRs that you may see include:

    Valuable features and benefits

    Purchase APR
    This is the standard interest rate applied to purchases you carry from month to month.
    Intro APR
    his is a special intro rate offered by issuers to entice new cardholders — like 0 percent APR for 12 months on balance transfers or new purchases.
    Cash advance APR
    This is the APR you pay if you make a cash withdrawal against your credit limit. It’s usually higher than the purchase APR and often kicks in immediately, rather than after a grace period.
    Penalty APR
    This is a higher APR than the standard rate that’s applied as a penalty if you miss a payment or fail to pay your statement. Many penalty APRs can be as high as 29.99 percent or more, depending on the issuer.

  • A balance transfer is the process of moving debt from one account to another account — such as to a new credit card. If you want to pay off high-interest debt, you can transfer and consolidate those debts to a card offering a lower interest rate. Or better yet, a balance transfer credit card with a 0 percent intro APR offer.
  • A cash advance is a cash loan you can take out against your credit card limit. Although it’s similar to taking cash out from an ATM with your debit card, a cash advance from your credit card is subject to both a high APR and transaction fees. And cash advances don’t come with a grace period, which means interest is applied from the moment you take out the advance.
  • In addition to a penalty APR, you may be subject to high penalty fees if you pay a bill late, your payment is returned or if you exceed the maximum limit on your credit card.
  • Rewards rates are bonuses on your spending that come in the form of cash back, points or miles. A credit card will state which type of rewards it offers and how you can earn rewards on purchases.
  • If you want to use your credit card for purchases outside of the U.S., you may need to pay a fee for each transaction. Many issuers charge foreign transaction fees of around 3 percent of your transaction amount. If you travel abroad a lot, or shop online with vendors based abroad, you can save money with a credit card that charges no foreign transaction fees.
  • Many issuers offer new cardholders welcome bonuses when they sign up for a new card. These offers allow you to earn a cash back, points or miles bonus when you spend a specific amount on your new card over a stated period of time. These bonuses are also called welcome offers, intro bonuses or sign-up bonuses, depending on the issuer.

4. See if you can be preapproved

Before you apply for a card, see if the issuer offers card preapproval. While preapproval does not guarantee you’ll be approved for the card, it does give you an idea of whether you’ll see success with your application — without a hard credit inquiry that can temporarily lower your credit score.

Start with Bankrate’s free CardMatch tool to be matched with personalized offers through a prequalification process and soft credit pull that won’t harm your credit score.

5. Prepare for a dip in your credit score

Most credit card applications trigger a hard inquiry into your credit report, which means that the card issuer will pull your credit report to check your creditworthiness. A hard inquiry will result in a slight drop in your credit score, though only temporarily. The maximum amount of time a hard inquiry will stay on your report is two years.

If you’ve recently applied for a credit card and the issuer denied your application, it’s important to be mindful of when you apply for your next credit card. One hard inquiry on your report is a pretty neutral occurrence in the long run. However, applying for multiple credit cards over a short period — with their accompanying hard inquiries — would be a red flag for card issuers.

It’s best to wait at least three months between applications.

6. Put together a repayment strategy

Having a credit card comes with the responsibility of making payments. Making late payments or only minimum payments opens you up to interest charges and fees, in addition to potentially hurting your credit score. For that reason, the best way to pay your credit card bill is on time and in full every month.

Estimate your monthly payments

Before you apply, make sure to budget for at least the minimum payments to keep your account in good standing. Keep in mind that your credit utilization ratio should also be below 30 percent if you want to maintain or improve your credit score. Your credit utilization ratio is the amount of credit you’re currently using divided by the amount of credit you have available.

For example, if you’re approved for a credit card and offered a credit limit of $10,000, you’ll want to make sure that your monthly statement never exceeds $3,000. If your credit utilization ratio is more than 30 percent, your credit score may drop because the ratio of revolving credit used to revolving credit available is too high. If you have a large purchase coming up and want to use your credit card but avoid a hit to your credit score, simply pay off the purchase early — such as a few days after it’s reflected on your online account.

Avoid late payments with autopay

Even one late payment can make your score drop by more than 100 points — but how much a late payment will affect your score depends on factors like your credit history and how late the payment is. To help you avoid late payments, most credit cards allow you to set up automatic payments. This tool can streamline the payment process and overall financial health.

If you forget to pay a bill, most issuers won’t report a payment as late until a bill is at least 30 days past due. So, if you end up paying it a few days or even a few weeks late, as long as you pay the bill in full the issuer likely won’t report the payment as late to the major credit bureaus — saving your credit score. In full is key, because if you pay only a partial payment late, your issuer is likely to report a delinquency to the credit bureaus.

7. Gather the necessary information

Before you apply, make sure you know the information you’ll need for your application. Early access to this information will help the process to go more smoothly, and you’ll have a better idea of your chances of approval.

Common personal and financial information you’ll need to apply include your:

  • Full legal name
  • Date of birth
  • Current address
  • Social Security number
  • Annual income

Other information you may need

Be prepared to provide more detailed information, if the issuer requires it. For example, the issuer may want to know how long you have been at your current address, whether you own or rent your home and how much you pay monthly for your housing. It may also ask about your current employer, main source of income and any assets you may have. You can also include your spouse’s or partner’s income on the application as long as you have a reasonable expectation of access to that income.

Applying for a business credit card

If you’re applying for a business credit card and your business is considered big enough, you can apply with an employer identification number (EIN). Keep in mind that business credit cards may still ask for your Social Security number during the application process.

8. Choose a method to apply and follow each step

When it’s time to apply, there are a few different ways you can do so:

  • Issuer’s site. This is the easiest way to apply, allowing you to submit your information and required details online. How long it takes to be approved for a credit card varies, but you will likely receive the fastest response with this method. You may even get instant approval and use of a digital card until your physical card arrives in the mail.
  • By mail. If you receive a physical card offer, you can mail your completed card application to the issuer. Card approval with this method can take a few weeks, depending on the issuer. And you’ll have to wait for your credit card to arrive by mail.
  • Over the phone. Though not as common a method, you can call an issuer and apply for a card during business hours. Approval will be faster than by mail, though you could find yourself waiting on hold throughout the process.
  • In person. If an issuer operates a physical branch, you may be able to go to that location and apply for a card you’re interested in. Search online or call the number on your card offer to learn whether this is an option.

The bottom line

Getting a new credit card can be exciting, though completing the card application and waiting for approval can be stressful — especially if you’ve been denied a credit card before. You can alleviate some of the stress of applying for a credit card simply by reviewing your credit score and credit report beforehand to understand your card approval odds.

If so, you’ll have a good chance of approval. If you don’t, you may need to focus on building a stronger credit history until it’s a better time to apply for a credit card.