How to get a credit card: 7 key steps

Opening a credit card can be a smart way to build credit, manage spending and access valuable rewards. But before you can enjoy these benefits, it's important to understand how the process works — from application to managing your new account after you receive your new card.

The good news is that applying for a credit card doesn't have to be complicated. A little research and planning can help you narrow down a card that's a good fit for your financial needs and lifestyle. Here's how to get a credit card in seven steps.

1. Understand your credit score

Your credit score is one of the first details a card issuer looks at when you apply for a new account. Credit scoring models like FICO® and VantageScore® calculate your credit score using information from your credit report like payment history, credit utilization and length of credit history. This score helps lenders estimate how likely you are to repay future credit obligations on time.

Most card issuers have a minimum score requirement for each credit card they offer. Knowing where your credit score stands ahead of time can give you a clearer picture of the types of cards you might be eligible for.

When you apply for a card, the issuer typically performs a hard credit inquiry, which may cause a slight, temporary dip in your credit score. Some card issuers may offer prequalification or preapproval using a soft credit pull, which won't impact your credit score. Just remember, being preapproved or prequalified doesn't guarantee approval. It just gives you a better idea of your potential rate and eligibility.

2. Explore credit card options

Because of the wide range of available credit card options, it's smart to evaluate and compare different offers. You should search for a card that best fits your lifestyle, spending habits and credit score.

If you're building credit history, or rebuilding your credit, consider:

• Secured credit cards: Cards that feature a one-time refunded deposit as collateral and typically come with a credit limit that's equal to (or slightly higher than) the security deposit.
• Student credit cards: Some banks offer credit cards that typically feature modest (or no) rewards and basic features. These are designed for those with limited or no credit history.

If you have good credit (or better), you may qualify for more card options, including:

• Cash back cards: With cash back credit cards, you could earn back a percentage of your spending as flexible cash rewards.
• Travel rewards cards: These cards could be a good fit for frequent travelers who want to earn points or miles on their everyday spending.
• Balance transfer cards: If you're trying to pay down or consolidate other high-interest debts, a balance transfer credit card might help you save on interest costs and pay down balances faster.

Still not sure which credit card offer to choose? Our guide on the different types of credit cards can help you narrow your choices.

3. Choose a credit card

After you review your options, it's time to select a card that works for your goals and credit profile. However, be careful to avoid applying for too many credit cards at once to avoid impacting your credit score in a negative way.

As you compare card offers, consider the following details:

• Fees: Does the card charge an annual fee or foreign transaction fees? If fees apply, are the benefits worthwhile?
• APR: The annual percentage rate (APR) indicates how much you'll pay in interest if you carry a balance. How does that compare to other card offers?
• Rewards: Will you earn cash back, points or miles on everyday purchases? Are the rewards competitive and easy to redeem, and do they expire?
• Introductory offers: Does the card feature a welcome bonus or 0% intro APR offer?

It's also wise to think about how the card fits into your overall financial picture. For example, if you're paying down debt, a balance transfer credit card might help you save money. Or if you opt for a cash back card, you could save those rewards into a high-yield savings account like the Citizens Access® Savings to amplify your goals.

4. Gather the information you need to apply

Applying for a credit card is typically straightforward and simple. Still, if you take the time to gather your information upfront, it could make the process go even more smoothly.

You'll likely need to provide the following details on your credit card application:

• Full name
• Social Security number
• Date of birth
• Current address
• Annual income
• Employment status

Some issuers might ask for additional documentation if your application needs further review. Be honest about your income and financial details. Credit card companies use these details to assess your ability to repay and match you with the right product.

5. Submit your credit card application

When you're ready, you can apply for a credit card in one of three ways:

• Online: Online credit card applications are the fastest and most convenient — often offering instant decisions.
• Phone: Some card issuers may let you apply over the phone and have a representative walk you through the application process.
• Mail: Applying for a credit card via mail is less common, but it's still an option with some card issuers.

When a card issuer approves your application, you'll typically receive your new card in the mail within seven to 10 business days. But if a card issuer denies you, it will mail you a letter explaining why along with information about your credit score.

6. Use your credit card responsibly

Qualifying for a credit card is just the beginning. How you use your card plays a big role in your long-term financial health and credit history.

Here are several important rules to follow:

• Pay on time: Late payments can hurt your credit score and result in fees. Plus, payment history is a major credit score factor — worth 35% of your FICO® Score.
• Keep your credit utilization ratio low. Aim to use no more than one-third of your credit limit for the best impact on your credit score.
• Watch for fraud: Learn how to report credit card fraud and protect your personal information.

Using your credit card responsibly can help you build a solid credit history over time. Good credit can open doors to better loan terms, rental opportunities and even job prospects.

7. Credit card terms you should know

Understanding common credit card terms can make it easier to compare card offers and manage your new account in a responsible manner. Here are a few key terms you should know:

• Annual fee: A yearly charge to remain a cardholder
• APR (annual percentage rate): The yearly interest rate the cardholder pays on unpaid balances plus fees associated with the card
• Balance transfer: Moving a balance from one card to another, often to take advantage of a lower interest rate offer
• Cash advance: Borrowing cash against your credit card limit, usually at a higher APR and with an added cash advance fee (due to the high cost, it's best to save cash advances for emergencies)
• Late fee: A fee your card issuer charges you as a penalty for making a payment after the due date. This can increase your credit card balance and hurt your credit score.
• Penalty APR: A higher interest rate that may apply if you make a late payment
• Rewards: Cash back, points or miles you may earn on eligible purchases
• Closing date: The last day of your billing cycle when your statement is generated

Ready to apply?

Applying for a credit card is an important financial step. But you don't have to be overwhelmed by the process. Take the time to understand your credit score, compare card options and use your new account responsibly. A little preparation can go a long way toward setting yourself up for better financial and credit success in the future.

Explore credit card options from Citizens and find a card that fits your needs.