Credit cards are often used on impulse or when consumers need a line of credit right away. People don’t realize that there is actually a “right” time to apply for a new credit card. Time and credit go hand in hand and making a move before the time is right can hurt your credit score and your chances of getting approved for the credit card you want.
Credit card use can make or break a credit score. Improper spending, too many cards, maximum limits and missed payments can have a serious impact on your financial life. This impact is not only affecting your current finances, but will likely hurt your personal finances for the next seven years.
why time matters
There are a number of reasons people apply for a credit card, but if those reasons are impulsive, you may end up making your financial situation worse. Here are some examples of why timing matters when applying for a new card:
credit score status
If you haven’t checked your credit score or reviewed your credit history before applying for a card, you may have no idea where you stand. Even if you think your credit is outstanding, there’s a chance someone else is using your information for their own benefit. If you plan to apply for a card in the near future, you should ask for your reports and scores so you know what to expect. Also, it’s important to make sure your score is up to par so you can get your desired credit limit.
exhaustive investigation
When applying for a new card, you should do so only after checking everything that is available on the market. Too often, people sign applications that come in the mail simply because they are convenient or look good on the surface. Unfortunately, the wrong credit card can end up costing you too much money and compromising your credit rating. It is best to take the time to thoroughly evaluate your card options before applying. Compare offers, terms, incentives and fees before committing to a card.
recent apps
One of the reasons why the timing of card requests is important is because it is actually a factor in the complex calculation of scores. A consumer credit score will factor into your credit application timeline. Those who apply for multiple credit cards in a short period of time will lower their score and create a red flag for potential lenders who consider too many applications a risk. If you need to secure more than one credit card, you must wait several months in between. Too many credit inquiries at once will have a negative effect on your credit score.
financial preparation
Credit cards should never be taken lightly. The only way to ensure that you will be able to commit to using credit cards wisely is to be financially prepared beforehand. This means that each credit card account holder must have a set budget that describes how much can be spent on the card. Too often, cardholders will overspend simply because they have the credit available. Budgeting for expenses is vital to making sure you can pay off your card balance in full each and every month. Without a solid financial plan, balances carried over from one month to the next will mean your credit card will cost you more than you can afford. This can be the start of a vicious cycle of debt that is difficult to repair.
The bottom line on credit applications is that it is never wise to apply for a card because you feel like it or because you want one. Take time to prepare for the responsibilities that come with using and owning credit cards. When you are financially stable and confident that you can use credit to improve your finances, only then is the time to consider your options and start applying for the right card. Review all the terms and conditions of the cards on the market and select the one that best suits your financial needs and spending habits.