A Practical Guide to Shopping for a New Credit Card
We all remember the days of free-flowing credit. Our mailboxes were jammed with credit card offers, many of which were willing to offer us outrageously high credit limits and easy terms and conditions.
We all knew this fairy tale couldn’t last, and it sure didn’t.
Things are different now when it comes to credit cards, and that’s an understatement.
If you are interested in securing a new credit card, the road may be a bit more difficult than it was just a year or two ago. For starters, your mailbox is most certainly not full of credit card offers, let alone good credit card offers.
To put the credit crisis into perspective: consumers are expected to witness 60 percent fewer credit card offers this year, following a huge decline of 71 percent in 2008.
Now, that’s not to say that you can’t get a great credit card with a competitive interest rate, it just may be a bit more difficult. There are a few things you can do to ensure that you are approved for the best credit card with the most competitive terms and conditions:
- Order a copy of your credit report – In order to qualify for the best credit card with the best rate and features, you will need to have a pristine credit report. It is therefore a good idea to check out your credit report to make sure that it is free of any errors or discrepancies. Don’t forget that you are entitled to a free copy of your credit report from all three credit reporting agencies every year.
- Consider your current level of debt – Creditors, now more than ever, are considering an individual’s income-to-debt ratio when it comes to credit approval, interest rate and credit limit, so if you have a considerable amount of debt, now is the time to pay it down, not take out another credit card. In addition, don’t take on additional credit card debt if you plan on making a large purchase in the near future, such as a car or a home.
- Consider your wants and needs – You should consider all of your wants and needs before applying for a credit card. Do you need a card with a low interest rate? Are rewards important to you? Is a large credit limit what you need? Take all of these factors into consideration before applying for a credit card that might not be right for you.
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