If you want to improve your chances of being approved for a credit card, here are some simple rules to follow.
Check your credit
Before you apply for a credit card, it can be a good idea to check your credit to find out where you stand. Why? When you apply for credit, your credit provider will likely check your credit information to see how well you have dealt with credit in the past. If you have a good relationship with credit, you are more likely to deal with it responsibly in the future.
However, if you have a bad relationship with credit, that signals to credit providers that you may not cope well if they provide you with more credit. So, how do you find out what your credit says about you? You can apply to any of New Zealand’s three credit reporting companies – Centrix, illion or Equifax – to get a free copy of your credit record.
This report includes your payment history on any credit cards in your name, on mortgages, car finance and hire purchases. It may also include your payment history for other bills like gas, electricity and phone accounts. Note, if you want access to your credit record in a hurry, you may need to pay for an expedited service.
If you notice any errors on your credit record, you can apply to have them corrected before applying for a credit card. If your credit turns out to be not that great, you may need to work on improving it. Or, if your credit is good, you now know that you are free to apply for credit cards that require a good credit history (which is most of them).
Find a card that suits you
Time to compare your options? First, you need to understand your needs. Understanding what you need from a credit card, as well as what you can afford, can help you narrow your search, while also increasing your chances of finding a card that suits your needs.
For example, if you are a low income earner, you may need to look for lost cost cards that have a low minimum income requirement. If you want to pay off existing credit card debt, you might want to compare balance transfers. If you want to earn rewards on your spending and you always pay off your balance each month, you could look into rewards cards options.
There are lots of different types of cards, each of which suit different types of spenders. Think about what matters most to you – saving money, paying off credit card debt, earning rewards – and compare the options to find a card that matches your needs and your spending style.
Read the small print
Yawn. Small print is boring, yes. But it does tell you everything you need to know about a card before you apply, as well as what you need to be eligible. If you are interested in a card that earns rewards or offers a number of complex features, the small print can tell you how they work, how much value they will offer you, and how to make the most of them.
In terms of eligibility, the small print will tell you what you will need to apply. Typically, you will need to be 18 or over and a New Zealand citizen or permanent resident. You may also need to have good credit and meet a minimum income requirement. Low cost cards generally have a lower minimum income requirement, while premium cards usually require a higher annual earn.
Consider banking options with your card provider
While it’s certainly not essential, you may find your application goes somewhat easier if you already bank with your potential credit card provider. By opening a savings account or debit account with your provider-to-be, you can create a relationship, especially if you deposit money into that account regularly, and are responsible with your account.
Doing this not only speeds up the application process, it can also provide evidence of your income stream, potentially making you a better candidate for approval. Of course, make sure the account fits your needs, and take into account any ongoing costs associated with keeping the account.
Find out what you need to apply
To make the application process run as smoothly as possible, it’s a good idea to find out what information you will need to apply. How much information the card provider needs will usually depend on whether you are a current or past customer. Depending on the provider – and whether or not you have a relationship with them – you may need:
- A copy of your New Zealand driver’s licence.
- Personal information, including your current address details.
- A current email address and a mobile or landline number.
- Financial information including your annual income, household income (if married/de facto), monthly living expenses, employment details, superannuation (if retired), or other sources of income.
- Details about any other credit cards and loans you have and their balances.
Pay attention during the application process
A credit card application is not the place to make silly mistakes. Those mistakes could slow down the application process, or even see your application declined. While it may seem like the provider is asking for a lot of information, it’s important to check it’s correct before hitting apply. And, while it should go without saying, don’t lie to make yourself look better. That is fraud.
Don’t apply for multiple credit cards at once
One last thing to remember is to only apply for one credit card at a time. While it may be tempting to apply for a few, just in case you don’t get approved, you are in fact increasing the chances of all applications being declined. Each time you apply for a credit card, it gets recorded on your credit record. Applying for multiple cards at once doesn’t look great to potential providers, so choose one card that you know suits you and your eligibility, and put your efforts into that one.
Ready to compare your options? CreditCard.co.nz can help you do just that. Compare your options now and apply online through the provider’s site. Easy!