Opening a credit card is a big step in terms of your finances. A credit card is an excellent resource for boosting your credit score and demonstrating your ability to pay back debt, but it also comes with a lot of responsibility.
When deciding how much money to lend your way, lenders will review your credit score, which will impact the interest rate they’ll assign to you. It’s no wonder many people want a credit card, but it’s essential to understand the requirements before applying for a credit card.
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What information do you need to open a credit card?
Credit card companies will ask for some personal details before you can open a credit card. Expect to provide the following information about yourself:
- Legal name
- Date of birth
- Your current age
- Social security number
- Physical address
- Annual income
Do I qualify for a credit card?
Receiving credit card offers and pre-approvals does not guarantee that your application will be approved. The conversation around how to open a credit card expands well beyond offers and pre-approvals.
Qualifying for a credit card isn’t as easy as assembling legal paperwork. However, the requirements for credit cards vary by company, so some credit cards will be easier to obtain than others. Credit card companies favor applicants who bring in a decent income and have sufficient funds in the bank because it shows that they’ll have the means to pay off their future credit card debt.
Some people wonder, “Can anyone get a credit card?” Luckily, even applicants with low credit scores can qualify for credit cards, but there’s a catch. Low credit scores come with higher interest rates. Paying off your debt is paramount to avoid the inflated interest rates and boost your credit score so that your credit card’s interest rate decreases over time.
How can I get a credit card for the first time?
Every credit card applicant hopes to get approved on the first try, and it’s normal to wonder how to go about being approved for credit cards. These credit qualification factors will guide you on the path to getting approved for your first credit card.
Credit card companies want to see that you have a consistent income stream. This factor indicates that you have the ability to promptly pay off the debt you accrue.
Any assets such as stocks and real estate will improve your qualifications. Credit card companies will recognize that you can sell your assets to pay off your debt if you have to, and while this scenario is far from ideal, it gives credit card companies more confidence, increasing the likelihood of them approving your credit card application.
Current debt load
Credit cards give you access to more debt, and not all credit cardholders pay off their debt on time. Credit card companies know this, so they look for applicants who aren’t straddled in debt already. A credit card would only make things worse. If you are debt-free or your income sufficiently covers your debt payments, credit card companies will likely approve your application.
Type of credit card
Some credit cards are easier to obtain than others. Some credit cards cater to people who have credit scores below 629. Secured credit cards require an upfront deposit which acts as your collateral and credit limit. These credit cards cater to applicants who lack a very good or excellent credit score, which is a score of 690 or greater.
Type of credit card issuer
Banks rely on built-in systems to determine if you qualify for a credit card. You will quickly learn if you qualify for a credit card or not when you apply. If you want to broaden your application beyond your credit score and payment history, seek an alternative credit card from an up-and-coming startup. These issuers tend to consider additional factors when reviewing your application.
5 credit card alternatives for people with bad credit
Not everyone will qualify for a credit card on the first try. However, you can still build up your credit score and get access to funds when you need them. Here are some credit card alternatives to explore.
1. MoneyLion Credit Builder loan
The MoneyLion Credit Builder loan allows you to establish a credit history or rebuild a low credit score. You’ll get immediate access to some of your funds, and MoneyLion won’t conduct a hard credit check when giving you the loan.
The membership helps you monitor your credit, receive personalized credit-building insights, and earn cashback by logging into the MoneyLion app. More than half of all members raise their credit score by 60 points within the first 60 days, which will positively impact your credit card’s interest rates.
Instacash gives you quick access to extra funds at 0% APR. MoneyLion does not conduct a hard credit check, and paying down your debt will improve your payment history over time. Instacash starts with instant access to $25, and your cash advances will increase to upwards of $250 if you deposit money into your MoneyLion account and make on-time payments.
You can unlock even more Instacash by setting up a RoarMoney account or becoming a Credit Builder Plus member!
Not everyone can get a credit card right away. MoneyLion’s Overtime feature is a buy-now-pay-later service that functions similarly to a credit card. If a product costs $100, you can pay $25 for it now and then make three monthly payments of $25 rather than paying $100 upfront.
Overtime’s installment loans come at 0% APR, and buyers can take out up to $600 for the installment loan. Overtime does not require a monthly fee, and it also comes with no interest. Overtime requires a soft credit check, though that will not impact your credit score.
4. Debit cards
Debit cards are easier to obtain than credit cards. However, they do not help you build credit, and you can only utilize the funds in the checking or savings account linked to your debit card. If you take out a small loan and keep the money in your bank account, you will increase the funds that are accessible to you, which will help you avoid overdraft fees. Paying down the loan will help with your credit score as well as your ability to access a traditional credit card.
5. Peer-to-peer lending
You can take out a personal loan without relying on a bank. Peer-to-peer lending allows you to borrow money from ordinary people seeking higher returns on their capital. You’ll still have to apply for a peer-to-peer loan, but you’ll have various opportunities to borrow money. Review the terms and conditions before accepting any loan as peer-to-peer loans range in terms of their interest rates and principles.
The journey to obtaining a credit card
A credit card provides numerous financial advantages. Paying off your debts will boost your credit score, which will open the doors to lower interest rates and enhanced negotiating power for any loans you want to secure in the future.
However, it’s good to have a backup if you don’t get approved right away. Any credit card holder can benefit from access to additional funds on demand. You can set up a RoarMoney account today and immediately gain access to Instacash.
Get up to $250 with an APR of 0% to pay off your credit card debt or cover extra expenses through Instacash!
Frequently Asked Questions
Can anyone get a credit card?
While a high credit score makes the application process easier, applicants with low credit scores can still get credit cards.
What credit score is needed for a good credit card?
FICO ranks a good credit score is anywhere from 670 to 739. If your credit score exceeds 690, you should have no issue securing a good credit card.
What is the minimum salary for a credit card?
Large credit card insurers tend to accept a minimum salary of $10,000 per year to get approved. MoneyLion accepts alimony, child support, and unemployment as forms of income.