3 Unexpected Ways to Get Your Credit Card Application Approved
by Lyle Daly | Updated July 21, 2021 - First published on Feb. 14, 2021
Worried your credit card application won't be approved? Here are ways to improve your chances that most people don't know about.
You're about to apply for a new credit card, and you want to tilt the odds in your favor as much as possible.
When you're in this situation, you probably already know all the basic advice on how to get your application approved. Pay your bills on time. Check your credit score. Choose a card aimed at consumers in your credit score range. Don't apply for lots of new cards in a short amount of time.
That's all good advice, but there are also some less-common methods that can make a difference. I've been approved for over 15 top credit cards, in part because I've done my homework on how to maximize my chances on every application. If you want to give yourself an edge, try one or more of the following.
1. Open a bank account with the card issuer
Financial institutions like it when you have different types of accounts with them. They make more money if you have banking, credit card, and investment accounts compared to if you just get a credit card with them.
That's one reason why you can get preferential treatment by having an existing relationship with a credit card company. If you have a bank account with them, then you're a customer and not just a new applicant. The card issuer will have more incentive to keep you happy, which could raise your approval odds.
A bank account also gives the card issuer more information on your financial situation. Depending on how often you use the account and the balance, it could help show that you're a low-risk applicant.
2. Pay down your credit card balances
A key factor in your credit score and getting approved for a new card is your credit utilization ratio. This is the ratio of your credit card balances compared to your credit limits. For example, if you have a $500 balance on a card with a $1,000 credit limit, your credit utilization would be 50%.
A low credit utilization increases your credit score. It also helps with credit card applications. When you have low credit card balances, card issuers will consider it less risky to approve you.
Aim for a credit utilization of 20% or less. And if you're planning to apply for a credit card, consider paying down your balances as much as you can at least a few weeks in advance.
Card issuers typically report your balances monthly. By paying down balances in advance, there will be enough time for them to report your new balances before you apply for your next card.
3. Use any other cards you have with that card issuer
If you have any cards with a credit card company and you're applying for another, make sure you're using the ones that you already have.
Credit card companies want clients who use their cards regularly. After all, they make money from transaction fees. Inactive credit cards don't bring in money, and it actually costs the card issuer to keep these accounts open. Especially costly are the consumers who open cards, get the sign-up bonuses, and then never use those cards again.
When applying for a credit card, you want to look like the model cardholder. If a card issuer sees that you have other cards with it that you're not using, it will be hesitant to approve you for another.
The easy solution is to put more purchases on those other cards. You could simply divide your regular monthly expenses onto any cards you have. Then, the card issuer will see that you're a cardholder it wants to keep happy.
Normally, credit card applications aren't too difficult. But they can be tougher in certain situations, such as when you have a short credit history or an average credit score. Card issuers have also gotten stricter during the COVID-19 pandemic. If you want to make it more likely that you're approved, the tips above could come in handy.
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