Credit cards are excellent for building credit and paying for expenses, such as medical bills and rent. Credit cards offer different benefits, like cashback, zero annual fees, travel rewards, and welcome bonuses. But customers need to fulfill some criteria set by the bank to avail themselves of these services. So, those considering applying for a new credit card should avoid a few common mistakes that can get one’s online application rejected.
1. Neglecting to do research
One of the biggest mistakes people make when applying online for credit cards is not researching enough. The prospect of buying whatever one wants on credit can lure one into impulsively applying for a credit card. This might mean signing up for a credit card that has ample application restrictions. This is why it is vital to read the terms and conditions regarding restrictions to avoid getting one’s application rejected.
2. Failing to consider credit score
The acceptance of credit card applications is highly dependent on the applicant’s credit score. Not checking when applying for a card can lead to high variations in expected and approved interest rates. Individuals should check their credit scores and narrow down the cards they want to apply for. Doing so can help them improve the chances of application approval and keep the interest rate from skyrocketing. There are times when multiple rejections might further negatively impact the applicant’s credit score.
3. Submitting multiple applications
Often, people apply for multiple credit cards at once in the hopes of getting approved for at least one. They might do so to save time by not waiting around for a rejection to come in. But this might not be the best way to go about the process. Credit card applications go through a thorough background check. When people apply for multiple cards at once, it also means multiple background checks happening simultaneously. The bank may consider this a red flag, and this can affect the applicant’s credit score.
4. Skimping the application
People often tend to ignore the fine print when hitting the submit button on their online credit card applications. The idea of instant credit cards is enticing and might end with people skipping the finer details. It is one mistake that should be avoided at all costs. It is essential to read through the APR values and the terms applying to them, including penalty period, point calculation, fees, and more. All of these factors play an important role in selecting the right credit card and managing it well.
5. Failing to factor in spending habits
Submitting a credit card application simply because the benefits sound promising is not the right decision. Individuals must consider their spending habits. Just because a card offers heavy discounts at restaurants or dining out does not mean it will benefit the applicant. The frequency with which they prefer to eat out will play an important role in the functional benefits. Similarly, a card with an air mile reward system will be of no use to someone who doesn’t fly often. Selecting a card that specifically benefits the individual and their expenditure patterns is more beneficial than the limited-period introductory offer in the long run.
6. Not checking prequalified offers
Individuals need to start checking with their bank about any existing pre-qualified offers. Chances are, there is a perfectly good credit card that their existing bank can offer them based on their existing profile and credit score. This will take away a huge chunk of the stress and paperwork of applying online for instant approval credit cards. Since the bank already might have enough information about the applicant, it simplifies the process and further speeds it up.
7. Neglecting annual fees
One of the most common mistakes people make is not checking for the card’s fee and billing structure. Check to ensure that the card’s annual fee fits within the budget. No one wants to end up with a credit card that costs more in annual fees and interest compared to the benefits it brings along. Only submit applications for the card that justify the annual fee with the benefits.
8. Submitting without reviewing
One should avoid submitting a credit card application without reviewing it. Hastily filling out credit card applications can lead to making many mistakes, such as typos. Also, one should not submit any false data to improve the chances of approval. All these practices can further contribute to rejection or might result in a lower credit score. Neither are favorable outcomes for the applicant.