How to apply for a credit card?
The most favorable card rates are offered by mid-size regional banks. Anyone with a decent credit record can apply for and obtain a card from one of these banks, even if out-of-state.
Start by exploring the banks near you. If their rates are too high, look to banks in states that have tighter lending laws. The three leading states in this regard are Arkansas, Delaware and Oregon, where the maximum interest charged is 5 percent over the federal discount rate, but never more than 17 percent. Don't assume, however, that all banks in low-interest states have low card rates. Several major banks have moved their credit card operations to states where interest regulations are less restrictive.
When shopping for a credit card, make sure you:
1. Select the bank institution wisely. Choose those that are seeking new business aggressively.
2. Find out if you qualify for the card by asking what the credit requirements are.
3. Before applying, calculate your personal debt-to-income ratio. (Add all of your monthly expenses and divide this amount by your monthly gross income.) Most financial institutions won't even consider you if your debt-to-income ratio is higher than 50 percent. (Preferably it's less than 40 percent.)
4. Always list a checking and savings account on your application, even if you have very small balances.
5. Fill in all spaces as best you can. If you have nothing to put down or it does not concern your situation, mark ''N/A" in the space.
6. Type, or print neatly.
7. Apply at one banking institution at a time. If you are rejected, find out what needs to be corrected so you don't make the same mistake twice.
8. Make sure that all of your credit reports are correct. If not, start correcting and disputing your credit report information.
9. Make sure that the phone number is listed in your name.
10. If this is your first credit card, ask for a small line of credit. You can always ask for an increase later on.
tags: credit card, how to
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