Credit cards are often used impulsively 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. Inadequate spending, too many cards, maximum limits, and missing payments can have a serious impact on your financial life. Not only is this impact affecting your current finances, it will likely hurt your personal finances for the next seven years.
why does time matter
There are various reasons why people apply for a credit card, but if those reasons are impulsive, you can end up worsening your financial situation. Here are some examples of why timing is important 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 are. Even if you think your credit is pending, 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 request 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 arrive 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’s 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 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 take into account the timeline of your credit application. 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 see too many applications as a risk. If you need to secure more than one credit card, you have to wait several months in between. Too many credit inquiries at one time 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 can commit to using credit cards wisely is to be financially prepared beforehand. This means that each credit card account holder must have a budget in place that outlines how much can be spent on the card. Too often, cardholders will overspend simply because they have the credit available. Budgeting expenses is vital to ensure that you can pay your card balance in full each and every month. Without a solid financial plan, balances that carry over from one month to the next will mean your credit card will cost you more than you can afford. This can be the beginning of a vicious cycle of debt that is difficult to repair.
The conclusion about credit applications is that it is never advisable to apply for a card because you feel like it or because you want one. Take the time to prepare for the responsibilities that come with using and owning credit cards. When you’re financially stable and confident that you can use credit to improve your finances, only then is it the right 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.