How to Apply for a Credit Card
Whether it’s your first time or not, getting a credit card may not be as simple as many British consumers may think, and a little bit of research will be required if you want to secure the best type of card for you and your spending needs.
In this guide, we explain the types of credit cards available, walk you through the three main steps of applying for a credit card online and answer the most frequently asked questions to help you make an informed decision when comparing deals and avoid damaging your credit rating.
Check your score now to see how likely you are to be accepted for credit (remember, eligibility may differ between lenders and deals):
How to apply for a credit card
Here are the three main steps to follow if you’re thinking of getting a credit card, including questions and options you should consider beforehand to ensure you’re getting the best credit card deal for your needs.
1. What credit card do I need?
There are many different types of credit cards available with different banks, lenders and creditors in the UK, so your first step is identifying the type of card you need, as this will make your decision easier when it comes to shopping around and comparing deals online.
The main types of credit cards can be used for:
- General spending
- Getting cashback and rewards
- Making large purchases
- Balance transfers
- Oversea travel
- Improving your credit score
If you want a credit card to help you out with essential, everyday spending such as doing your food shopping, paying the bills or you just want it there as a safety net for unexpected costs in the event of an emergency, you’ll need an everyday spending credit card.
Getting cashback and rewards
If you want a card for general spending but with added benefits, you might want to consider a cashback credit card or reward card. This type of card will reward you for each purchase you make, which may be in the form of cashback, points, travel (air) miles or discounts, depending on the provider and the deal.
One thing to bear in mind, however, is that reward credit cards usually charge you a fee every year and the interest rates are generally higher than standard everyday cards, so it’s important to make sure that the rewards will be worth the cost of the card in the long-run. As the interest rates are generally high, you will probably need a good credit score to be eligible.
Making large purchases
If you’re looking to buy an expensive item, such as a sofa, laptop, holiday or new kitchen, you may be better off getting a 0% purchase credit card where you can spread the cost out over a certain period and not pay interest on top. Some cards may offer a 12-month interest-free period, for example, while others may be as little as three months or as long as 20 months or even more.
It is important that you make each monthly payment on time and in full. If you don’t, your lender could shorten the 0% period and your credit score is likely to decrease as a result.
Additionally, it’s also important to pay off the balance within the interest-free period, because once this ends, you will have to pay interest on top of each monthly payment, meaning that you’re paying back more overall.
You may want to get a balance transfer credit card if you are currently trying to pay off any debts or credit card balances. This lets you consolidate all your debt into one monthly payment without any added interest, helping you manage your debts more efficiently and clear them quicker.
If you’re planning on going to another country for business or pleasure, a travel credit card (or currency card) can help to cut the cost of spending overseas, as standard credit cards may incur fees if you use them abroad for things like booking a hotel or withdrawing money from ATMs.
For people who want to improve their credit score in order to get the best deals on the market, particularly younger consumers (aged 18 to 25) or those with a bad or no credit score, a credit builder would be the best type of card to get.
As long as you pay off the balance in full every month, your credit score will improve and you will therefore seem more creditworthy to lenders.
2. Credit card eligibility - What do I need to apply for a credit card?
Before applying for a credit card, it’s important to think about whether or not you will be accepted, because if you apply without taking this into consideration and the lender rejects your application, your credit rating and score may be damaged, meaning that it will be more difficult to secure the best credit deals in the future.
When lenders look at your credit card application, they will want to assess the following information about you:
- Your age: To be eligible for a credit card, you must be aged 18-years-old or over.
- Your salary: Many credit card providers will expect you to be employed, and others may require you to be earning a specific salary or higher. This largely depends on the company and the type of credit card you’re applying for.
- Your financial history: How you’ve managed your finances in the past says a lot about your spending habits, so the provider will check your credit report to see if you’ve ever faced financial difficulty, such as a bankruptcy or a County Court Judgement (CCJ). If you have either of these or any other negative marks, you may be refused a credit card, or at the very least, you’ll be offered a more expensive deal with higher interest rates.
- Your credit score: This is the main indicator used by most lenders and creditors to determine how much of a risk you pose to them. Your credit score and history shows how well you have managed money in the past and whether or not you have made all your payments in full and on time. This then helps them make an informed decision as to whether or not to lend you money or give you a credit card.
In summary, lending money and providing credit cards to consumers in the UK is all about risk, so the less risky you seem, i.e. the more financially stable and sensible you are, the better the deals you will be offered and the more likely you are to be accepted.
If you’re unsure about your eligibility and you want to protect your credit file, you can always try using a credit card eligibility checker like that offered by MoneySuperMarket to see what cards you are likely to be accepted for.
Check your score now and get a detailed credit report with the UK’s four main credit reference agencies:
3. Complete your credit card application form
Once you have identified the right credit card for your needs, found the best deal online and you have considered your eligibility by checking your credit score and history, you can then complete the application process with your chosen lender.
You don’t have to apply for a credit card online if you don’t want to; you can visit your local bank, apply over the phone or by mail, but it’s worth remembering that the best deals are usually offered online.
When completing the credit card application, make sure you are honest and fill in the correct information from start to finish. If the lender accepts your application, you should receive your credit card within 7 to 10 days, but it may take a bit longer depending on your provider.
Why has my credit card application been declined?
If your application is rejected, it could be due to your credit history or an issue on your credit report.
The best way to find out why you were denied a credit card is to check your credit file to identify any potential problems that may be holding you back. You can then try to rectify them if possible, or perhaps you will need to work on building your credit score and consider other options for the time being if you can.
Credit card advice: Check your credit score first
It is important to note that while you may find a great credit card deal online, you may not end up with that specific offer.
If the lender checks your credit score and financial history, and they can see that you are financially reliable, then it’s likely that you will be offered the deal you applied for.
However, if your credit score is poor or you have some negative marks on your report, this could result in you being offered a deal with a higher interest rate and stricter terms, or even being rejected completely if they feel you are too much of a risk.
Before being declined or being offered a worse deal, always check your score first so you know where you stand. If it’s low, then it probably isn’t in your best interest to apply, as you may get rejected and end up with a glitch on your report as a result.
Important: Making multiple credit card applications in a short space of time can make you seem desperate to borrow in the eyes of lenders and it can cause your credit score to plummet, so be sure to check your eligibility first before applying.
Learn more: How to Improve Your Credit Score: 10 Hacks
Credit broker VS lender - What's the difference?
A broker, however, does not lend money; instead, it acts as an intermediary between you and the lender, and essentially does all the hard work for you by searching through all of the deals offered by the creditors they work with to find the best one suited to you and your needs.
Whatever way you choose to find a credit card, you should still shop around online yourself to see what interest rates and fees are currently being offered across the market. This way, you’ll have a better idea as to whether you are being offered a good deal or not.
Is it safe to apply for a credit card online?
Generally - yes, it is safe to get a credit card online and this is usually the preferred way of applying for one due to convenience and access to better deals.
If you’re comparing credit cards on well-known comparison sites then you can rest assured that you are getting a credit card safely.
If you want to deal with a company directly and you want to be extra cautious, however, you should do your research on the lender to ensure they are a reputable credit card provider.
To do this, check their website to see if they are authorised and regulated by the Financial Conduct Authority (FCA). If they are, this means that the company has been approved to carry out regulated financial services and provide credit to UK consumers.
You can also look at a wide range of customer reviews online to get an idea of the service received by other borrowers.
What is credit card protection?
Every credit card comes with payment protection, which ensures that any purchases you make between the value of £100 and £30,000 are covered.
So, if you should experience a problem with your purchase, such as buying a damaged item and being unable to get a refund or replacement with the seller, you will be able to claim your money back provided it meets the requirements of the credit card protection law (Section 75 of the Consumer Credit Act).
Learn more: A Guide to Credit Card Protection
How long does it take to get a credit card?
Applying online is the quickest way to get a new credit card, compared to applying by post or visiting your local branch, and generally, you will be informed if you have been accepted or denied almost straight away.
Provided that there are no problems with getting your credit card application approved, the card itself shouldn’t take long to arrive. You should get it via post within 7 to 10 working days, but it may take longer (up to two weeks) if your chosen lender has different terms and conditions.
What if i have a bad credit score?
If you’ve checked your credit score and it falls in any of the ‘low’, ‘poor’ or ‘fair’ categories (i.e. it is not ‘good’ or ‘excellent’), then you probably won’t get the best deal you found online; instead, after the application process, you’ll probably have to pay higher interest rates, which means you’ll be paying more for credit overall in the long-run, and you’ll be on a worse deal than what you originally found.
This is why it’s a good idea to check your score and eligibility before applying for a credit card. If it’s low, you either accept that you’ll be paying more for your credit card or you consider your other options instead.
Your best option would be to work on improving your credit score before applying for credit so that you can secure better deals in the future.
Learn more: 8 Reasons to Improve Your Credit Rating
Ready to check your score?
To get a good idea of your credit card eligibility, the best place to start is by looking at your creditworthiness and checking your score and report.
This way, you’ll be able to make more informed decisions when it comes to choosing a deal and you can rectify any errors on your report that may be holding you back.
At Bobatoo, we recommend using the credit-checking website Checkmyfile to see your score, as you also get access to the information held on you from each of the four main credit reference agencies, giving you a more detailed report than anywhere else online.
The first 30 days are free and you’ll be charged £14.99 thereafter, but if you don’t want to pay and make the most of Checkmyfile’s handy services, simply cancel before the free trial period ends.