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About three-quarters of Americans have at least one credit card, according to a 2016 Gallup poll. In fact, the average person has 3.4 cards. But whether you have a wallet full of plastic or have never charged a purchase in your life, you should know how to apply for a credit card the right way when the time comes.

Step 1: Determine What Type of Card You Need

“The most important thing is to apply for the right card,” says Alex Cohen, co-founder and CEO of Birch Finance, an online platform that helps people earn more credit card points.

For instance, if you’re the head of finances for your family and find yourself spending hundreds of dollars on groceries, gas and other living expenses, you may want to look for rewards cards that offer cash back on these spending categories. Similarly, if you travel often, you could benefit from a travel rewards card that lets you earn miles or points to use toward hotels and airfare. And if you’re just getting started using credit, you might need to give a secured card a shot until you’ve built up a solid credit history.

Think about your goals for getting a credit card: Do you want to earn rewards on spending or simply have a low-cost card available in case of a financial emergency? Do you want to build your credit from scratch or take advantage of a long, solid credit history? Asking yourself these types of questions can help point you in the right direction as to the type of card you need.

Step 2: Understand Your Credit Situation

Successfully getting a credit card starts well before you fill out your application. Being denied isn’t the end of the world, but there’s plenty you can do ahead of time to increase your chances of approval. The first step is taking stock of your credit situation.

It’s important to check that your credit score is high enough for the card you want. “If you're going for the top-tier rewards cards like the Chase Sapphire Preferred Card, the Capital One Venture [Rewards Credit Card] or the Chase Freedom Unlimited, then your scores need to be above or near 700,” says J.R. Duren, a personal finance reporter for consumer-focused website HighYa. He explains that one of the best ways you can ensure you're approved is to know which credit scores the company is looking for and then verify that you are within that range.

There are a few ways you can see your credit score, including via paid services. However, several banks allow you to see your FICO score – the credit score used by most lenders – for free through their online banking platform. You can also use a free site such as Credit Karma, though you will not see your FICO credit score. Instead, you will be able to check your VantageScore, which is not the same as your FICO score but will give you a rough estimate of where you stand.

It’s also important to check your credit report from each of the three credit bureaus. Your credit reports can help you identify items that might be bringing down your score, such as an account in collections or even an error on your report. Again, you can do this for free. The website federally authorized to provide free credit reports is AnnualCreditReport.com, where you can pull your credit report from each bureau at no cost once per year.

Step 3: Get Your Finances in Shape

Once you know where you stand creditwise, you might find that your score is not quite where you need it to be. Fortunately, improving your credit score doesn’t have to take much time, and there are a couple of things you can do to raise it right away:

Pay down your debt. One of the best ways to improve your credit score and increase the chances of being approved for a card is to “pay off as much outstanding [debt] as possible before applying for a new card,” says Cohen. That’s because this immediately lowers your credit utilization – the amount of credit you’re using in comparison to the total credit you have available – which makes up 30 percent of your FICO credit score. If you pay off a significant portion of your outstanding debt, you should see a change to your credit score within about 30 days.

One of the best ways to improve your credit score and increase the chances of being approved for a card is to “pay off as much outstanding [debt] as possible before applying for a new card,” says Cohen. That’s because this immediately lowers your credit utilization – the amount of credit you’re using in comparison to the total credit you have available – which makes up 30 percent of your FICO credit score. If you pay off a significant portion of your outstanding debt, you should see a change to your credit score within about 30 days. Fix credit report errors. If you happen to find an error when reviewing your credit reports, be sure to dispute it right away. Even something seemingly insignificant could have major consequences. For example, if the report misspells your name, it might also contain someone else’s account information. To fix errors on your credit report, send a letter to each credit bureau via certified mail with return receipt requested explaining the error and how it should be corrected.

Step 4: Shop Around for the Best Deal

Once you know what type of card you want and your credit and finances are in good shape, it’s time to start shopping around for the best deal. There are a few factors you should evaluate when comparing credit card offers:

Interest rate: Ideally, you would pay off the balance on your credit card every month, in which case the interest rate wouldn’t matter. But money matters rarely work out exactly as expected, and sometimes, you need to carry a balance month to month. The average credit card annual percentage rate is 16.15 percent, according to CreditCards.com, though exact rates you’re offered will depend on your credit and other personal financial details.

Introductory offers: As a way to entice new applicants, some card issuers will offer an introductory zero percent APR that lasts about 12 to 18 months. This can be especially beneficial if you’re looking to consolidate credit card debt and pay it off – just keep in mind that it's common to pay a balance transfer fee of about 3 percent. Be sure to make all your payments on time and pay off the balance in full before the introductory period is over.

Annual fee: With so many cards on the market, it’s rare that paying an annual fee is worth it. A 2015 study by NerdWallet found the average rewards credit card annual fee is $58, which means you’d need to spend $2,000 every year with a cash back rate of 3 percent to break even. However, some credit cards can offer such lucrative rewards that the fee to own the card is a drop in the bucket. It all depends on the reasons you apply for a particular card. If you simply want a traditional credit card for one-off purchases, look for a fee-free card. If you are looking to strategically earn rewards points or cash back on everyday spending, be sure that if it requires an annual fee, you understand the rewards structure and how to make that extra expense worth it.

Rewards and perks: In addition to low rates and fees, look for cards that offer rewards that match up with your personal spending habits. It’s not hard to find an inexpensive card that also offers rewards, whether you’re a starving student or a savvy traveler. And don’t let them go to waste – 31 percent of U.S. cardholders don’t even bother to redeem their rewards, according to a 2017 Bankrate survey.

Step 5: Submit Your Application

Once you’ve nailed down your decision, it’s time to officially submit an application. The easiest way to apply for a credit card is online. To do so, you’ll need to provide a few key pieces of information, according to Credit.com:

Full legal name

Address

Birth date

Social Security number, or individual taxpayer identification number in some cases

Annual income – include all sources of income, such as from a side hustle or Social Security benefits. If you’re 21 or older, you’re not required to have an independent income and may report your household’s income instead, as long as you have access to it.

In many cases, you will be approved or denied within seconds of submitting. Sometimes, however, your application will need to undergo a manual review, which can take several days.

How to Maintain Good Credit While Using Your Card

Getting your hands on a credit card might be as easy as spending 15 minutes filling out an online application and then waiting for it to arrive in the mail, but owning a credit card is a big responsibility. Once you apply for a credit card, it’s crucial to understand how it will affect your credit and avoid any mistakes that could result in a lower score.

Keep your credit utilization low. If you already have one or more credit cards with outstanding balances, adding a new card to your wallet can actually help your credit score increase. As mentioned above, the amounts you owe compared with the credit extended to you – your credit utilization ratio – accounts for 30 percent of your FICO score. So by adding an additional line of credit, you decrease your ratio immediately. Keep your balances low to avoid increasing your credit utilization. “Once you pass 30 percent, scores will drop significantly,” notes Duren.

Pay your bills on time. After you’ve worked to improve your credit score, be sure not to miss any payments on your bills, which can reverse your progress. At 35 percent of your total FICO credit score, payment history is the most important factor. “Avoid making payments that are at least 30 days late,” says Duren. Just one late or missed payment can knock your score by 90 points or more, according to credit bureau Equifax.

Avoid applying for too many cards. Finally, don’t go on a credit card application spree. You’ll want to be calculated in your approach and only apply for cards you know you have a good chance of qualifying for. Otherwise, you will rack up several hard credit inquiries over a short period of time, which can temporarily bump down your score. Credit inquiries make up 10 percent of your credit score – not as impactful as factors such as payment history or credit utilization, but still significant.

According to Cohen, however, you don’t have to worry too much about an inquiry here and there, as long as you don’t go overboard. “Applicants will most likely only see a 2-to-4-point drop in their credit [score], unless they go over eight to 10 cards within two years.”

Duren also notes that if you’re applying for a Chase credit card, specifically, “know that they'll automatically deny you if you've signed up for five credit cards in the past 24 months, including cards on which you're an authorized user.”

What if You’re Denied?

Speaking of getting denied, what do you do if that happens? First, you should stop applying for cards and find out why you were denied in the first place.

Any time you’re denied a credit card due to information contained in your credit reports, the creditor is required to send you an adverse action letter explaining why. Usually, you’ll receive this electronically soon after your application goes through, but sometimes it will be sent in the mail within seven to 10 days.

Some of the reasons your application could be rejected include a low credit score, limited credit history or low income. Read this letter to get a better idea of why yours was denied and see what you can do to improve your chances of getting approved down the road.

If you disagree with the decision, you can call the card issuer and ask it to reconsider. There’s no guarantee it will, but a calm demeanor and strong negotiating skills can help.