Be the Right Age

Generally, you must be 18 years old to get a credit card. In most states, this is the age you must be to legally sign a contract. Some credit card issuers might approve your credit card application if you’re under 18. For example, minors can get credit card approval with a co-signer or another credit card on their credit history.

Soon, it will get harder even for young adults over 18 to get a credit card. Starting February 22, 2010, credit card issuers can’t give you a credit card if you’re under 21 unless you have a co-signer or you can prove you have enough income to pay your bill. The new rule is intended to protect young adults from too much credit card debt too soon.

Demonstrate Financial Responsibility

First credit cards can be more difficult to get. Banks often look to see whether you’ve been financially responsible in the past. The first place they look is your credit report, a compilation of your previous credit accounts. If you’ve never had a credit account before, the credit card application will ask questions about your checking or savings account. Your credit card application might ask how long you’ve had your checking account, whether you’ve overdrawn, and your current balance. Using this information, the card issuer can determine whether you qualify for a credit card.

If you already have a credit history, credit card issuers check your credit report to see whether you’ve had past serious delinquencies like credit card charge-offs, collection accounts, repossession, or foreclosure. If you’ve had any of these, you might not qualify for a credit card. Late payments can also prevent you from getting a credit card.

Have an Income

Before you can get a credit card, you should have a source of income that you can use you repay what you charge. Credit card applications typically ask for your place of employment and your income. You won’t qualify for a credit card if you don’t have a job.

Not only does your income help you qualify for a credit card, it’s also used to help determine how much credit to give you. If you have a higher income, you have a better chance at getting approved for a higher credit limit.

Just Apply for One

When you’re shopping for a credit card, you may be tempted to put in several applications at once, thinking that at least one of them should get approved. Unfortunately, this can keep you from getting a credit card at all.

Whenever you make an application for credit, the card issuer checks your credit report to determine whether you qualify for the credit card. Your credit report includes a listing of everyone who checks it.  These are called credit report inquiries. When you have too many inquiries on your credit report, they begin to think you’re either desperate for credit or taking on more credit cards than you can afford to repay. This can keep you from qualifying for a credit card. Rather than put in multiple credit card applications, just make one.

If you get denied for a credit card, wait to receive the credit card company’s letter explaining why you didn’t qualify. Then, work to fix those reasons and reapply for another credit card.

Credit Cards for Those Who Don’t Qualify

If you don’t qualify for a credit card because you have bad credit or because you don’t have credit cards at all, there are credit card options for you.

A secured credit card is a credit card with a credit limit that’s “secured” by a deposit. Secured credit cards are ideal for consumers who can’t qualify for a regular credit card. These credit cards often have an application fee and annual fee, but don’t rely on a credit check for approval. Instead, you make a deposit that guarantees your credit limit. You’re still required to make payments on your credit card balance, but if you default, your deposit will be used to cover the balance.

A secured credit card can help you qualify for a credit card in the future, if the payment history is included on your credit report. Similarly, you might be able to convert your secured credit card to an unsecured credit card by making a certain number of on time payments.

A prepaid credit card is another type of credit card you can get if you don’t qualify for a standard credit card. Similar to a secured credit card, you must make a deposit to use a prepaid credit card. However, whenever you make purchases with a prepaid credit card, the balance of the purchase is subtracted from the deposit you made. For example, if you load $100 onto a prepaid credit card and make a $50 purchase, you only have $50 left (assuming no fees were taken from your balance).

You can get a prepaid credit card without having to go through a lengthy application process or credit approval. However, a prepaid credit card won’t help you improve your credit history because it’s not reported to the credit bureaus.

Ideally, you would qualify for a credit card because you meet the criteria explained above. Fortunately, if you can’t get a regular credit card, you have other options.

Related posts:

1. What is a Secured Credit Card?