Searching for a credit is not unlike walking down the cereal aisle at your local grocery store. There are dozens of options and only a few of them really appeal to your taste. However, unlike picking out the right cereal choosing the wrong credit card can result in a very displeasing application experience.
Credit card issues already know whether or not they’re going to approve your application. That decision was made by someone you’ll never meet in a city you’ll never visit. The credit card issuer’s criteria is not public information but you can make some well educated guesses as to your likelihood of actually being approved.
If you’ve got poor credit you’ll waste your time applying for an unsecured platinum credit card with a $25,000 credit limit. You simply don’t fit their proper risk profile. Conversely, if you’ve got sterling credit then applying for a secured credit card or anything from a subprime credit card issuer is also a bad idea.
Additionally, if you know you are going to carry a balance from one month to the next (the formal term for this is “revolving”) then you should shop for one of the many credit cards that offer zero interest for 6-15 months, which are pretty common right now. Again, these cards are reserved for consumers with better than average credit scores so be realistic and temper your expectations accordingly.
If your financial situation is one where you struggle each month making your payment then, even if you have good credit, you’re not going to want a card with a large credit limit. A “classic” style credit card is a better fit because the issuer will restrict your credit limit to no more than a few thousand dollars, which is large enough to give the card good usability but low enough to guarantee that you won’t get into crushing credit card debt.
Shopping around for a credit card is not as easy as shopping for a mortgage or auto loans. When shopping for a mortgage you can simply visit a broker who will have access to funds from dozens of reputable lenders. When shopping for an auto loan it’s as easy as getting preapproved from your bank or credit union.
There is no “broker” that sells credit cards. But, there are some very reputable companies that operate credit card comparison websites. Here you will be able to go window shopping for credit cards by comparing interest rates, credit limits, no interest grace periods, and rewards programs. Once you find the card you believe meets your wants and needs, you can apply via the comparison website.
This comparison site strategy is really the best method for credit card shopping. The last thing you want to do is apply for several cards at the same time. When you apply for a credit card the issuer will pull your credit reports and credit scores, which means they’ll be adding a credit card inquiry to your credit report. Credit card inquiries are among the most damaging to your credit scores.