Credit Card Applications: What To Know - Part 2
Pricing and Terms (Continued)Cash Advance APR - The Cash Advance APR is a special APR rate for cash advances: the amount extra you will pay if you use your card to withdraw money from an ATM. This number is usually fixed. Companies make money off your store purchases. They do not make money off cash advances unless you fail to pay off the balance at the end of the month.
Cash Advances will also be assessed a fixed amount or a certain percentage the moment you withdraw them. You cannot avoid this charge by paying the amount back at the end of the month. The Chase Freedom® card, for example, assesses $10, or 5% of the amount, whichever is greater.
Over The Limit - This is a fee assessed if you go over your credit limit. Some cards will charge this fee; others will not.
Going Through the ApplicationIf you've found a product you like and you're ok with the fine print, it's time to click the "Apply" link. Here's what you will usually have to provide.
Basic address information. This information is just to verify residence and identity.
Your social security number. This requirement is tied directly to your credit score and will be used to access your score.
Financial information. This will include the type of other accounts you have, such as savings and checking accounts, as well as your annual income, employer's name, the source of income, and whether you rent or own your home. This information is also used to determine your creditworthiness.
You may or may not receive an approval immediately. Depending on the system or the complexity of your application process, you may be approved immediately, or you may have to wait a few days before you get a response. However, the information collected will be minimal and will be the sole information used to make a determination.
Improving Your Application ChancesIf you want to improve your chances of successfully getting a card, here a few tips:
Know in advance what credit score the company accepts. You can use a large number of online resources to find this out. You may also contact companies directly to inquire about what scores they look for when making the approval.
Wait until your score is higher before you apply. If you have a mediocre score, work on improving it first before you fill out an application. This may take some time, and you may need to put off that application for a few months or a year.
Know your income level -- and be honest about it. As this information is self-reported, it's important to know the exact amount and be honest about that amount. Companies can reject your application if they discover you lied about it.
That's a rundown of the essential elements that you need to understand to determine whether a card is right for you and whether you're likely to qualify for the card you want. You should now be ready to apply with confidence!