What is a
Credit Card Application?
A Credit Card Application is submitted to
individual credit card institutions with the intent of the receipt of approval
for an individual credit card. A credit card is defined as a financial
instrument that permits an individual access to preapproved funds for use. The
repayment of these funds is both implicit and required.
The process
of completing a Credit Card Application requires the applicant to complete the
expressed fields for completion, which include the name, social security
number, and biographic information of an individual. In addition, a description
of finances, wages, employment, residence, and tax information are typically
required. However, due to the vast expanse of credit cards available – in
addition to various components, terms, and conditions latent within individual
credit card contracts – choosing the best credit card may be a difficult task.
Individual
applicants may consider the following steps upon completing a Credit Card
Application:
Credit Card Application Step 1: Credit Score
Analysis
Your credit score is a rating that is determined
on an individual basis with regard to the respective credit history and
eligibility attributed to any and all applicants for credit cards. A credit
score is typically determined through the usage of the Fair, Isaacs, & Co.
(FICO) ratings system. This system undertakes the analysis of individual credit
scores upon the investigation of individual financial history. Prior to
completing a Credit Card Application, you are encouraged to obtain a copy of
your credit score in order to further understand the standards and practices
attributed to individual credit scores.
Credit scores classified as ‘excellent’ will
typically range from 850 (the maximum score) to 740. Credit scores classified
as ‘good’ or ‘very good’ will typically range from 739 to 700. Credit scores
classified as ‘fair’ or ‘average’ will typically range from 699 to 620. Credit
scores classified as ‘low’ will typically range from 619 to 580. Credit scores
classified as ‘poor’ will typically range from 579 to 300 (the minimum score).
Credit Card Application Step 2: Understanding
Interest and Annual Percentage Rates (APR)
This type of interest is defined as an expressed
and established percentage of the gross available balance of a credit card,
which is added to the full amount in the midst of repayment. Although the term
‘annual’ appears within its title, the APR is both furnished and incurred on a
monthly basis. The full repayment of a credit card balance on a monthly basis
will relieve an individual from accruing additional surcharges rendered by the APR.
You are encouraged to analyze your finances in
tandem with the applicable APR. This will ensure that you will be able to
furnish repayment in lieu of incurring additional fees and charges.
In the event that you are already in possession of
a credit card, the level of promptness and sufficiency with regard to
past repayment of outstanding credit card balances account for upwards of 35%
of the approval process on a Credit Card Application.
Credit Card Application Step 3: Making a Credit
Limit Work for You
A Credit Limit is defined as the maximum amount of
funds available for use by the individual owner of the credit card. These funds
are required to be repaid in addition to any accrued interest. However, a
credit card managed responsibly allows for an individual in possession to
increase their respective credit score through prompt repayment and responsible
usage. In addition, this will typically result in increased credit limits.
Credit Card Application Step 4: Credit Card
Application Legality
The CARD Act of 2009, which is defined as The
Credit Card Accountability, Responsibility, and Disclosure Act, disallows for
both predatory lending and exploitative measures undertaken by credit card
lending institutions. However, individuals are always encouraged to explore the
terms of an individual credit card application with both legal and financial
counsel.
