How to apply for a new credit card. Credit card applications have dropped by 40% amid coronavirus—
If your credit card no longer suits your needs, it may be time
to apply for a new one.
To decide whether you’ve outgrown your current card, there are a
few different things to consider. Below, walks you through the questions
to ask yourself before pulling the trigger on a new card.
1. Are you earning rewards in the right categories?
Because different
credit cards offer different rewards based on the spending category, it’s smart
to consider where most of your money is actually going.
For instance, if you regularly dine out, you may want to
consider getting the, which offers 4% cash-back on dining. Or, if you are
big on cooking, the earns users 6% back on up to $6,000 spent per
year at U.S. supermarkets (then 1%).
Some credit card issuers have tools that can help you decide if
the card you’re considering makes sense for your lifestyle. For example, the,
which offers 2% cash back at grocery stores and 3% cashback on dining that
estimates how much you could earn annually based on your monthly spend on dining,
groceries, travel, and other purchases.
2. Are you paying high interest?
The best way to get the most of your credit card is to pay your
bill on time and in full each month. But if that’s not possible, you don’t want
to be stuck paying high-interest rates on the money you owe.
3. Does the annual
fee outweigh the benefits?
It’s tempting to sign up for a card with a high annual fee
because they often come with a lot of cool perks, like statement credits,
access to upgrades and big welcome bonuses. But before you shell over money for
a card, you want to make sure you can afford the fee and will use the card
enough that it’s worth the cost.
For instance, let’s say you frequently travel and are looking at these cards can have annual fees upwards of $450, but often provide numerous
statement credits and perks that help offset the steep fee.
The offers a $300 annual travel credit and access to over
1,000 lounges with Priority Pass Select membership (valued at approximately
$429). Those perks effectively add up to over a $729 value and don’t include a (both
in 2020 and 2021) and a credit for a Global Entry ($100) or TSA PreCheck ($85)
application (every four years).
4. Do you have a big purchase coming up?
If you plan on taking on a large expense, such as a major
appliance or cost of a medical procedure, it can be a good idea to put that
charge on a card offering no interest on new purchases for six to 18 months.
These cards allow you to pay off the debt over time without incurring interest fees
— just make sure you pay off your balance in full by the end of the intro
period.
One option for financing a big purchase is the. This card offers
no interest for the first 15 months on new purchases (then 15.74% to 25.74%
variable APR). Plus, you earn 1.5% cashback on every purchase.
5. Have you applied for a card in the last six months?
If you apply for credit cards too frequently, card issuers may
see this as a red flag and a potential indicator that you may not be a
responsible cardholder. However, if you want to shop around for the best credit
card offers, consider pre-qualification forms.
Most card issuers offer which allows you to check your
qualification chances without hurting your credit score. Simply fill in some
information and receive an answer to whether you may qualify, with no damage to
your credit score. Just know, pre-qualification is not a guarantee of approval, and when you submit a formal credit card application your credit will be
pulled, which dings your score.
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