We should only apply for credit cards we stand a reasonable chance of getting, and we should check all the eligibility criteria before we apply.
Lenders who allow quotation checks before making a firm application can help us work out whether we're likely to be accepted for a card.
If we're approved for a credit card, it will usually arrive within two weeks and the PIN number should arrive shortly afterwards.
How to choose a credit card
Deciding the right type of credit card for our needs is the first thing to consider before applying for credit cards.
Although it's easy to compare credit cards and then apply online, it's important to choose the type of credit card that is best suited to us and apply to cards we're more likely to be accepted for.
As we explain below, multiple applications in a short space of time can affect whether our credit card search will be successful, so we should pick and choose the cards we apply for carefully.
There are several major types of credit card to be aware of:
- Balance transfer - These allow customers to move existing debt from one credit card to another with a 0% interest period
- 0% purchase - These offer a 0% interest rate on purchases for a set amount of time
- Cashback rewards - These offer cashback as a percentage of a customer's spending on the card
- Credit builder - These are designed for customers who are trying to build or rebuild their credit rating and usually start with low credit ratings
Other types of credit cards are available, but the key thing when choosing between different credit card types is to understand the main purpose of each one. This will help determine how much the credit will cost and how much benefit we will get out of it.
Pay attention to the terms and conditions of credit cards. We've got a full guide on credit card terms and charges to explain what they mean and how they can help us compare cards.
Applying for a credit card
The process of applying for a credit card is straightforward thanks to the speed of online applications.
There are roughly seven steps to finding the right credit card and applying for it:
- Decide what type of credit card you want
- Search and compare credit card deals
- Click through to lender's website and double-check card details
- Check eligibility before applying (if possible)
- Provide all information lender requests
- Receive an instant decision
- Sign the credit card agreement
This process may vary depending on the lender, but it's a rough guide to applying for a credit card and what we should expect to happen.
Bear in mind that some lenders won't offer quotation or eligibility searches, so it can be impossible to see whether we're likely to be accepted before signing up. It can be worth avoiding cards without eligibility checkers if we think we'll be rejected - more on this below.
Many credit card deals are only available through online applications and lenders actively push customers towards these types of applications. However, we may be able to apply via phone or in a branch - check with a lender's website directly to see if this is an option.
When applying for a credit card online, we should check the site we're dealing with is the right one. We've got more on staying safe when browsing or shopping and how to keep your personal details secure in our dedicated guides.
Information to provide on application
The online application forms for credit cards will usually ask us for basic personal information alongside more detailed information about our financial situation.
Expect to share details such as:
- Personal information: title, name, date of birth and contact details
- Home address: accommodation status (owned or rented), length of time at that address and postcode
- Previous address: information may be required if current address has been changed in last three years
- Employment details: work status, job title, employer details and contact information
- Finances: salary information and current bank account details
- Existing credit: other credit cards, loans or non-credit borrowing such as mobile phone contracts or bank overdrafts
Lenders will also obtain other information through credit checks - we cover those in more detail later.
What is an instant decision?
Thanks to online applications, we can find out instantly whether we can get a credit card from a particular lender or not.
This is useful, but it doesn't mean we should apply randomly for cards in the hope we're accepted. We cover this issue in more depth below, as well as looking at what happens if a lender rejects us.
In addition, while it can be tempting to just apply for cards that promise quick decisions, it could be worth applying to one that takes a little time instead.
Instant decisions are generated by computers, with the technology looking at all the information available about us and making a rapid yes or no choice.
This can make it tricky for customers with poor credit to get good deals.
In these cases, speaking to a lender directly might be one way of overturning an instant decision or finding out why the application was unsuccessful.
What do lenders consider?
Credit card providers will consider a credit application based on various factors.
There will be eligibility criteria such as a minimum age of 18 and residency in the UK. At the same time, lenders will also consider:
- How much an applicant earns and whether these are static or fluctuating earnings
- The financial history of an applicant including whether they have been bankrupt in the past or have County Court Judgements (CCJs) against them
- An applicant's credit score
These elements are somewhat intertwined, so an applicant's earnings will affect whether they've been able to comfortably make payments on credit before and how good their credit score looks.
A credit score is one of the best ways a lender has of checking whether we're going to be able to repay what we borrow on a credit card.
There are three UK credit reference agencies (CRAs) that lenders report to and we can access our credit reports online to see what information they hold and, crucially, whether it's correct.
It isn't only our own credit score we might need to be concerned about. Financial linking between individuals can cause problems as we explore in our guide to spouses running up debt in our name.
Learn more about how to repair a credit rating.
Multiple applications
Making several credit card applications in a short space of time can signal to lenders that we are desperate for credit and can also have an adverse impact on our credit rating.
If credit card providers run hard searches and decide not to offer us credit, that attempt to get a credit card will stay on a customer's credit report for 12 months. This can be seen by lenders when they are deciding whether or not to offer you credit or not and may affect our credit score for six months.
This is where those eligibility checks we discussed earlier come into play.
These are also known as soft credit checks or soft searches and don't leave a trace on a credit report, so they can't be seen by companies.
A soft search gives an indication to customers thinking of applying for a credit card whether they will be successful. It doesn't conduct a full examination of our credit history though, so a subsequent hard credit check might turn up something the initial soft check didn't, and we still may miss out on that credit card.
However, we're more likely to be accepted for a credit card if we've run an eligibility check and passed that first, meaning they are well worth doing if available during a provider's application procedures.
How long does it take to get a credit card?
At the end of an application for a credit card, we have to sign an agreement to accept the terms of the card.
These signatures are electronic when we're dealing with an online application, but they still constitute a formal and binding agreement between us and the card provider.
Usually, we can expect to receive our credit card in around 10 working days, although the PIN number will be sent separately and may arrive a few days later. This will affect how quickly the card can be used for in-store purchases.
If we want to improve our chances of getting a card quickly, we can:
- Look at cards from current financial providers such as our bank
- Choose cards with instant decision guarantees
- Ensure we've checked our credit record for anything that might slow the process down
- Apply early in the week to ensure companies can process the applications on their working days
Bear in mind that, even after issuing an instant approval, credit card companies will still have to run checks to make sure we are who we say we are. This could include:
- Identity checks
- Fraud checks
This might slow the process down, and it's not advised to plan to spend on a credit card until it's in our hands - just in case something goes wrong and the card delivery is delayed.
If we've been approved for a credit card and it has not arrived within two weeks, that's about the time to contact the provider and report the card as missing. In this instance, they will need to issue a replacement.
What happens if you're rejected
Credit card rejections can be frustrating, especially if we've followed all the right steps and genuinely believe we're a good fit for a specific card.
There are various reasons we might be rejected such as:
- The lender believes we already owe too much to other credit providers
- We don't earn enough or our income fluctuates
- Our credit history isn't detailed enough
- We've made late payments on other credit products
- We've made mistakes on our application form or forgotten to declare something
It's also possible we might be rejected because we've made too many recent applications for credit as discussed above or the lender can't confirm our identity.
On this second point, ensuring that we're on the electoral roll at the address used on the credit card application can help, so we can register to vote.
Remember, too, that it takes a while for changes like this to filter through to our credit report. Making changes like registering to vote or getting rid of an error from our credit record won't mean we can get an instant reversal on the credit card provider's decision.
If we're rejected by a credit card company, it's first worth checking whether it was down to an error we made such as applying for a credit card that wanted a minimum income of £20,000 when we can only prove we earn £15,000 per year.
After that, we can request more details from lenders to find out if they rejected us on the basis of information provided by a credit reference agency. This is a clause in the Consumer Credit Act, so we have a right to ask.
They must also provide information on which credit agency they used (Equifax, Experian or TransUnion), so we can check that report and find out what went wrong.
Summary: Choose applications wisely
Making a credit card application is deceptively simple, yet it's very easy to apply for cards we stand no chance of getting and potentially damaging our credit rating in the process.
Before applying for any credit card, we should:
- Choose the right type of card for our needs
- Check we meet the eligibility criteria for the card
- Find out if our credit record is looking its best
- See if a soft check is available with a lender rather than a hard check
Even if a soft check says we're approved for the card, a hard check may change the lender's mind. This is unfortunate, but some of the checks that lenders need to run can only be undertaken with a hard credit check
It's important to remember, too, that guaranteed credit cards are an illusion - even if a lender pre-approves us for a card, there are still hoops we need to jump through.
Once our application is accepted, getting hold of the credit card is fairly straightforward, but we may have to wait a couple of weeks before we have it in our hands and can start making purchases with it.
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