Credit Cards

Smoothing Out The Credit Card Application Process
Doug Smith

Defined Tag: Credit Card Application.

If completing a credit card application reminds you of a school exam, it should. You are being tested on your financial responsibility now and in the past, your level of debt, your income, your monthly bills, your monthly income, and many other monetary matters that are examined when you submit the card application.

Banks that issue such cards know that consumers want the least hassle possible. Therefore those same consumers just might fill out the easiest application form, regardless of the card or rates. Card applications often come in a brochure format, with a minimum of information requested on the forms. These are available at grocery stores, gas stations, and many other places where bank cards or debit cards are frequently used. Sometimes you can complete the application in-store and return it to the customer service desk for a decision.

If you do fill out a streamlined bank card application form, be honest. Give the correct information the first time, so that the bank can make an informed decision. Any misinformation, whether intended or not, will not only slow the approval process, but might make the bank suspicious of your application. Get a spouse or family member to review the information for correctness.

Also be prepared for lots of financial scrutiny. The issuing bank will dive into your credit report and also request your credit rating (FICO Score). Your current and past mortgages, lengths of residence at those mortgaged properties, car purchases, jobs, salaries, total debt, total income and other very personal financial details will be sifted. If you are applying for a joint card with your spouse, the spouse's financials might be screened too.

High credit scores, on-time payments, and a low debt-to-income ratio will count in your favor. Bad credit reports, a history of late or missed payments, and high debt will count against you. A bad financial history does not mean automatic rejection, but you are more likely to be issued a card with a low spending limit and a high interest rate. Good credit applicants, on the other hand, are more likely to be approved for a higher spending limit and a more reasonable interest rate.

While the card issuer is researching you, you need to research them! Read the card agreement carefully to learn what charges will apply to your account upon approval. Learn what counts as a late payment, so you can avoid them. Some banks will consider a payment late if it arrives on the due date, but after a specific time of day! Read the fine print in the cardholder's agreement to avoid these little surprises.

Submitting a credit card application doesn't have to hurt, but be aware that you are sending very personal and dangerous financial information, so handle it securely.

This article is Copyright 2009 by Doug Smith. All Rights Reserved Worldwide. Unauthorized Duplication Prohibited. For Entertainment Purposes Only. Not Intended As Financial Advice. Consult Your Own Financial Professional.