How Will Multiple Credit Card Applications Affect My Credit Rating?
With all the credit card offers cropping up - in your postbox, your email inbox, your favorite web site, your radio station - who could be blamed for wanting them all? A charity card to give to your favorite charity painlessly, a rewards credit card to earn a little something on your spends, a low interest card for those long-term purchases - and while you're at it, why not the credit card that gives you a new Razor phone, and the one that offers you a new CD player just for making an application? There are so many credit card companies willing to pay you with incentives just to apply - especially if you're an incoming student at the Uni - that you'd be a fool to turn them down, right? After all, the worst that will happen is that they'll turn you down, and you're no worse off than you started, no?
No. Unfortunately, that way of thinking can sink your credit score to the point where no lender will consider offering you a credit card or extending a loan to you. It can even affect your chances of landing employment or being accepted for a flat you want to let. The problem is the way that your credit report is used to calculate your credit rating. Whenever you apply for a credit card, UK credit card companies check one or more of the credit reference agencies to find out what your history is in regards to money. Every time a lender or prospective employer or landlord enquires into your credit history, the reference agency makes a note of it on your credit report. When you apply for every credit card offer that strikes your fancy, your credit report paints a picture of an irresponsible borrower - or worse - one in financial straits who is desperately trying to raise cash.
Instead, if you've decided to apply for a credit card, you should take the time to research the various offers, then choose the best credit card offers for your application. The next question, of course, is which is the best credit card? There's no obvious answer to that. The best credit card for you depends on the way you spend money, handle accounts and intend to use your credit card. There are, however, some general guidelines that can help you decide on the best credit card offers for you.
The Best Credit Card if you pay your accounts in full each month is a credit card that offers you incentives for using the card, and a nice, long grace period during which no interest is charged on new purchases. With a rewards or cash back credit card, UK affiliates offer special deals or cash back for all the purchases that you whack on your credit card.
If you generally carry a balance from month to month, the best credit card is one that has a low APR. A low rate of interest will save you money on the amount of interest you pay on your purchases.
The best credit card for anyone is the one that is most likely to accept you as a cardholder. Check carefully to make sure that you meet the minimum income, age and other guidelines before you apply for a credit card to avoid the disappointment of being rejected for a credit card.