Choosing and applying for a credit card

Before you start looking at credit cards, think about why you need one. 

What will you use it for – online shopping, holidays, bills or splitting costs? Some cards are better suited to certain purposes so make sure you know what type of credit card you want first e.g. a 0% balance transfer card if you want to pay off another credit card. 

This wouldn’t be very helpful if you want to use it for your shopping though – then a card offering 0% interest on purchases would suit your needs better, or one that offers cashback or another type of reward.

It’s also a good idea to think about repayments – can you pay the balance off every month or will you need to chip away at it? If you can’t pay it off in full each month, can you afford the interest rate that comes with the card?

With your specific needs in mind, it’s time to compare credit cards.

Look for these important details:

• annual percentage rate (APR) – the cost of borrowing if you don’t pay the full balance each month. A lower rate is better as it means you’re not paying as much to borrow money
• minimum repayment – the lowest amount you can pay back each month
• introductory rates – some cards have low or 0% rates for a limited time, which is great for balance transfers or big purchases
• rewards – some cards offer cashback or loyalty points which can be useful if you use the card regularly
• other fees – watch out for annual fees, balance transfer fees and charges for late payments

Using a comparison website can help you see what’s available but remember, not every site shows all credit cards, so it’s wise to check a few.

Many lenders have eligibility calculators that will show you which cards you’re likely to get without affecting your credit score. 

Once you’ve found a card you want, it’s a good idea to check your credit reports are accurate before you apply. 

Lenders will check your credit history, so make sure your credit reports are correct and up to date. Look at all three major credit report agencies – Experian, Equifax and TransUnion – and ask them to fix mistakes.

You’ve found a credit card that suits you, checked your eligibility and credit reports, so now it’s time to apply. 

Read all the terms and conditions before you start and make sure all the information you provide is accurate, as entering incorrect details could lead to problems down the line.

You can usually apply online, by post, over the phone, or in person at a bank or building society. 

The provider will check your credit record to see if they’re comfortable lending you any money. Your credit record contains details about how you’ve managed money in the past.

If approved, your card should arrive in about a week. 

Quick tip: applying for several cards at once can hurt your credit score. So, take your time and do your homework upfront. 

Providers may refuse your application if they regard you as a high-risk borrower. If you get turned down, it may be a good idea to check your credit report for areas you could improve before making further applications.