When is the Best Time to Apply for a Credit Card?

Unfortunately, "Personal Banking" is one of the subjects lacking from today's school curriculums... among other valuable adulting lessons...

Never fear! We're here to guide you on your credit card journey and when the best time to apply is.

Why should you consider applying for a credit card?

"There are a lot of reasons to have a credit card.  A credit card is a great way to build credit if you are just starting out, provided you use it responsibly.  They can also supplement your checking account and give you a sense of security if an unexpected expense arises."

— Kevin Petersen, Personal Banker at Security Bank & Trust Co.

When to Consider Applying

If you're 18.

When is the best time to apply for a credit card? When you are 18 or feel responsible enough. Responsible credit card use is the best way to build credit. Building a positive credit history is about more than being able to use a credit card to buy things. Your credit history becomes one of your personal identifiers — similar to a passport, driver's license, or social security number - that impact future finance and non-finance decisions. It plays a part in apartment application approval, securing your first job, getting a cell phone, and buying a car. So the sooner you can build credit to set your future self up for success, the better. 

If your credit is in good shape. (670 and above)

If you have already built a good credit score, you should consider upgrading your credit card to a card that offers more perks or rewards. Depending on your issuer, you could replace your card while keeping your existing account in order to maintain your account's credit history.

With good credit, it would also make sense to add on another line of credit. A new account means you would be eligible for new rewards and would have a new payment method for unexpected expenses.

If your credit is in bad shape. (579 and below)

While it is ideal to have good credit before applying for the best credit card offers, establishing, building, or rebuilding your credit should not be put on the back burner. The solution? Apply for a secured credit card.

Similar to traditional credit cards, secured credit cards require monthly billing; however, they differ in that you pay a deposit up-front as collateral if you are late on a payment. The drawback is that secured credit cards tend to have smaller credit limits and more fees.

If you're planning to a make a big-ticket purchase.

Whether you are planning your next vacation or want to replace your kitchen countertops, credit cards with the right perks can help reduce costs and save on interest. With a credit card, you will be able to pay for that big-ticket item over time instead of the entire expensive cost up-front. 

If there's a great rewards offer.

The best part of credit cards? The perks and rewards of course. Many credit cards offer free miles or a percentage of cash back on specific purchases — groceries, gas, restaurants — that can be used to pay back your monthly bill. So getting paid to spend I guess... sign me up.

Many credit cards will also offer a limited time welcome bonus or enhanced rewards in the first couple of months after opening. We see this especially before the holiday season from October to December.

If you're looking to consolidate debt.

Debt. What is it good for? Inducing stress.

Managing debt is not a hobby, but a necessary evil. Applying for a credit card can help make it easier. Using a balance transfer, you can combine your monthly payments or outstanding debt to save on those pesky high interest charges.

Keep in mind that most balance transfers have fees that could cost you more than just paying the multiple credit card payment dues. Debt consolidation also will not eliminate your debt. Darn.

When to Wait

If you're applying for a loan or mortgage.

Applying for any kind of loan requires the lender to look at your credit report to determine whether or not to approve your application, and what interest rate to offer you. Not only would you want your credit to be in tip-top shape for a higher chance of approval and better rates, but you will also want to know that every time your credit is reviewed by a lender, your credit score can be temporarily lowered.

If you've had recent hard inquiries.

Hard inquiries are another way of saying " a looky-loo that is a-lookin'". Translation: "a quick peek at your credit."

Similar to applying for a mortgage or loan, each credit card application and credit check can hurt your credit score. Just one hard inquiry has little to no effect on your credit score, but multiple inquiries within a short period... not great.

Unless what they are saying in those credit karma commercials is true, limit the inquiry.

Only you know your personal finance habits and what reasons you have for applying for a credit card. So, when is the best time to apply for a credit card? When you are ready. Don’t rush into a decision without preparing for the responsibilities that come with "limitless" spending. (Hint: it isn't limitless). Take time to examine your options and pick a credit card that best suits your needs, whether that is rewards, financing, balance transfers or something else.

Apply Today