It’s been over 70 years since the first credit card was issued and, since then, it became an essential financial product in the lives of many americans. Nowadays, getting a credit card is as simple as filling out a 2 minutes online form.
What is a Credit Card
A credit card is a financial product issued by banks, credit unions, online entities, etc., which allows you to borrow money under a line of credit. This money can be used for regular payments, purchases, services, etc.
Even though some credit cards can be more expensive than other ones - because when you borrow money, issuers may charge you interests -, a credit card can be beneficial for your financial history. It allows you to build credit and improve it if you are responsible and self-conscious about its use. But it can also damage it if you were not able to assume the responsibility it takes. This is why it’s important to evaluate if getting one right now is a good option for you.
Requirements to get a Credit Card
Requirements can change depending on the credit card issuer you are trying to work with but there are some general requirements that can make you more eligible to get the credit card you need.
> You must have a demonstrable income source. It usually refers to your job income but it can also be any other type of income you may have such as revenue of investments, pensions, grants, etc.
> You must be 21 or older. Even though there are some credit card options allow you to be over 18, most issuers require you to be over 21 unless you are trying to get a cosigner or to receive a supplementary credit card from somebody else
> You must provide your Social Security Number. It is essential to provide your Social Security number to your credit card issuer if you are a U.S. citizen. In the case of foreigners or international students, some issuers will also accept Individual Taxpayer Identification Number (ITIN).
> You must have a physical address. Applications cannot be completed without providing a physical address of your home or business. P.O. Box numbers are not accepted as consumer’s addresses.
> You must have a certain credit score. There are also options for people with bad credit and no credit at all, but some issuers will require you to have a certain credit score in order to get some types of credit cards.
How to apply for a Credit Card?
To get a credit card, there are 5 basic steps to follow:
Understand what is your purpose to get a credit card: This means to know why are you trying to get a credit card.
Examine your financial situation: To find out which credit card is better for you to apply, you first need to know where you are financially: your credit score, your monthly payment ability, your essential needs, etc.
Find the type of credit card that fits you better: Once you know what you need and what you can get, research the market and explore the options that fit you better.
Read the conditions & solve your doubts: Make sure to understand the implications and benefits of the card of your interest.
Apply for the best overall option for you: Time to apply and get your credit card!
Types of Credit Cards
According to creditcards.com, we can divide credit cards in 5 great types of credit cards:
- ★ Standard credit cards: The most common types of regular credit cards that are available for almost all applicant’s profiles. They are unsecured so no collaterals are needed. Most banks and credit card issuers offer these credit cards to the public and they can be divided in Balance transfer credit cards - that allows to transfer balance between cards - or Low interest credit cards - which usually offer low fixed-rate APR.
- ★ Credit cards with rewards programs: These credit cards makes customers earn rewards from their purchases or credit card usage. The rewards programs can be related to cash back, travel, retail, gas stations, etc
- ★ Airline mile / frequent flyer credit cards: These credit cards are similar to the rewards card but it allows the consumer to accumulate points for using it when flying. They can be either linked to one specific airline or designed to work with miles when travelling with any airline.
- ★ Bad credit and/or credit repair cards: As it name says, they are designed to help customers get a product that will help them improve or build credit. These cards can be secured or prepaid.
- ★ Specialty credit cards: They have been made for specific publics such as businesses or students.
Pros and Cons of Credit Cards
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