When you’re in the market for a credit card, chances are you don’t give much thought to the time of year — but should you?
When getting a new credit card, most of us are thinking of one thing — the stuff we need to buy. You might need a little stretch for your Christmas shopping budget, or you have a big surprise expense that can’t wait until you save your pennies.
Whatever the case, a credit card can help you make life happen. But there may be times when a credit card approved at the right time can give you an even bigger financial leg up.
When Should I Apply for a Credit Card?
The truth is, there’s no perfect time to apply for a credit card. If you need it, you need it. But if at all possible, it’s often better to wait to apply for a credit card around the winter holidays.
That’s because there are usually a lot of great credit card promotions during the holidays. These promos reward you beyond what you’d normally get if you applied at any other time of year.
For instance, if you’ve ever been shaken down at the department store checkout to apply for their store credit card, chances are they’ve tried to entice you with an extra 10% off today’s purchase. That discount is minimal, especially if you’re only buying a couple of items.
But closer to the holidays, that discount might more than double. And, if you’re doing lots of your holiday shopping at that store, you’ll knock off a fair amount of cash from your purchase. You might also get other perks, such as a 0% introductory interest rate or coupons that can help you save even more.
Beyond store credit cards (which don’t always help your credit, by the way), major credit card companies are also trying to attract new customers during the holidays.
Many credit cards come with welcome bonuses if you spend a certain amount within your first 30-90 days. If you’re already shopping more than usual because of the holidays, you’ll reach that bonus much faster — and can use that bonus to help pay off your card.
You might enjoy other perks, such as 0% interest for a period of time or cash back on certain categories. It’s “free” money that can help you get more for the money you were going to spend anyway.
What to Do Before You Apply for a Credit Card
It’s never too early to start thinking about your holiday shopping and planning purchases you know you’re going to make. A little planning can help you prepare to apply for a credit card and increase your chances of getting approved.
Before you put my credit card strategy to work, there are a few things you’ll want to do first.
First up, check that credit report. You should have a good idea of your credit score anyway, but it’s even more important when you’re thinking about applying for credit. Credit card companies will use your score in their decision-making. If there are issues on your credit report that are bringing your score down, you’ll have more time to request their removal or work on improving your score before applying.
It doesn’t cost you anything to check your own credit report, and it will not affect your score!
Next, try to avoid getting into any new debt. Getting new lines of credit can lower your average age of accounts and increase your credit utilization ratio. Both of these can lower your credit score and make it less likely you’ll get approved.
Also, spend some time shopping around for offers. Credit cards can vary in terms of interest rates, welcome bonuses, perks, and even fees. Starting early gives you more time to figure out what you want in a credit card.
You’ll want to apply for credit cards strategically, as each inquiry into your credit report can lower your score. Read about each card’s requirements carefully so you’re not applying for cards you’re not likely to get approved for. This will help you keep your score intact and increase your chances of getting the card you want.
Keeping Your Credit In Check
Applying for a credit card around the holidays can help you get more for your money — as long as you have a way to repay it. Any bonuses or savings you earn can get eaten up by interest if you’re not paying off your balance at the end of the cycle.
And even if now is not the right time for you to apply for a credit card, it’s always a good idea to keep your eye on your credit. You never know when you might need it — and it’s always better to have a good credit score and not need it than to need it and not have it.
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