By Scott Gamm
NEW YORK (MainStreet) — Not all credit cards are created equal. Simply signing up for the first credit card you stumble upon isn’t financially sound.
When tackling the credit card application process (and it is a process!), here are a few questions you want to ask yourself before you apply:
1. Why are you applying for a new card?
There are a variety of reasons why someone applies for a credit card. Maybe you’ve claimed bankruptcy recently and are looking to rebuild your credit from scratch. Or perhaps you’re a college student and are looking for your first credit card. And even if you already have a credit card, you might want to apply for a second one that has a more robust rewards program so you can start to accumulate slowly miles for your dream vacation.
The reason behind your desire to apply for a credit card will affect the type of card you should apply for. A credit card that’s appropriate for someone who just claimed bankruptcy (likely a secured credit card into which you deposit money as a security deposit) will not be the right card for someone looking to accumulate airline miles.
Get the picture? Once you know why you’re applying for the card, you’ll have a better idea of which cards should be on your radar.
2. How do I apply?
To make the process faster, once you find a credit card, apply for it online. You’ll need to provide basic contact information and your Social Security number. You’ll also need to include your annual income and in some cases how much money you have in a checking and savings account.
The credit card issuer will use this information to not only determine if you can afford to have a credit card, but what the appropriate credit limit will be given your income and financials.