Published in: Credit Cards | Nov. 26, 2018

When to Apply for a Credit Card

We are committed to full transparency as part of our mission to make the world smarter, happier, & richer. You should know that offers on The Ascent may be from our partners - it's how we make money. That transparency to you is core to our editorial integrity, which isn’t influenced by compensation.

If there’s one thing your next credit card application should be, it’s planned.A person using a laptop while holding a credit card.

Image source: Getty Images.

Before you rush into your next credit card application, consider that 1 in 5 consumers are using a credit card that's a bad fit, and the majority aren’t choosing the card that’s considered their best fit.

You should also consider that the timing of your credit card applications can affect both your credit score and your chances of being approved, as can the amount of credit cards you currently have.

Unfortunately, credit scores aren’t intuitive, and the best credit card advice isn’t always what you’d expect. Here are some guidelines to help you decide when to apply for a credit card.

4 instances when you shouldn’t apply for a credit card

The first thing to consider is whether or not it’s a bad time to apply for a credit card. If the following situations apply to you, you might want to hold off.

  1. You already have credit card debt. 
    If you’re currently paying off credit card debt, that should be your primary financial focus. Getting a new credit card will only encourage you to rack up additional debt. There is one exception to this rule -- if you think you can manage your spending and pay off your debt within 15 to 21 months, a good balance transfer credit card can help you pay off your debt faster.
  2. You’re prone to irresponsible spending.
    Be honest with yourself: if you can’t be trusted to avoid overspending, don’t apply for a credit card. None of the rewards or credit-building potential is worth falling into credit card debt.
  3. You have recent late payments.
    Your payment history is the single most important factor in your credit score. If you’ve recently had a late payment, your focus should be getting your finances in order and learning to better manage your payment due dates before you add another one into the mix.
  4. You applied for a credit card less than three months ago.
    Each time you apply for a new credit card, your credit report is pulled. This can cause your score to drop temporarily. While a couple inquiries won’t cause any real damage to your credit, having too many recent inquiries on your report will. In general, you should space out credit card applications by at least three months, if not six.

4 times when you should apply for a credit card

Knowing when to apply for a credit card is all about assessing your personal financial situation. If you find yourself in one of the following circumstances, it might be a good time to apply for a credit card.

  1. You don’t have a credit card.
    Credit cards are an essential part of building and maintaining your credit score. If you don’t have any credit cards, you might want to consider applying for a credit card designed for folks with little to no credit history. These can be secured credit cards, student credit cards, or sometimes credit cards with a bank you’ve already built a relationship with. If you find it hard to receive approval, you could try applying with a cosigner.
  2. You need to rebuild your credit.
    You should never get a credit card if you’re not certain you can use it responsibly. However, just because you made mistakes in the past doesn’t mean you’re doomed to repeat them. If your credit score has taken some major hits but you feel ready to use credit responsibly, getting a good secured credit card for people with bad credit is one of the best ways to increase your credit score, as long as you use it responsibly.
  3. You have good credit and only one credit card.
    The idea that the best way to preserve your credit score is by having only one credit card and using it only for emergencies is a myth. A recent FICO analysis showed that consumers with credit scores above 800, considered excellent, have three credit cards on average. Even Experian has stated that you need at least two credit cards in order to maintain a high credit score. Aside from your score, having a backup card is always smart.
  4. You’re not getting rewards from your current credit cards.
    If you have good credit, you should make the most of it. The best rewards credit cards, such as travel rewards credit cards and cash-back credit cards, can save you hundreds of dollars each year, if not thousands. If you really want to stack your rewards, look for credit cards with big sign-up bonuses.

What to do before you apply for a credit card

If you still think it’s a good time to apply for a credit card, make sure you prepare yourself properly before submitting an application.

Do extensive research in order to find a card that’s a good fit for your spending habits, and make sure you know your credit score so that you can judge whether or not you actually have a chance at approval. Finally, paying off all your credit card bills at least a few weeks in advance of applying can bring down your credit utilization ratio and help your chances of approval.

Remember that credit card debt is some of the most expensive debt you can have. The most important piece of advice is, as always, to pay off your balance in full each month, on or before your due date.

Our #1 cash back pick has a surprise bonus

This may be the perfect cash back card! That's because it packs in $1,148 of value. Cardholders can earn up to 5% cash back, double rewards in the first year, and avoid interest well into 2020. With such a deep bench of perks you'll wonder how this card packs in a $0 annual fee. Best yet, you can apply and get a decision in two minutes. Learn more with our in-depth review.

Find the right card for you

Cash Back & Rewards