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When to apply for a credit card

Whether you're applying for your first credit card or you want to add another credit card to your wallet, it's important to do so when the time is right. Before applying for a new credit card, you should first figure out why you're looking to apply for one. Are you a student who wants to start building credit? Are you already a cardmember who's looking to earn points or bonus offers? Whatever the reason may be, understanding when to apply for a credit card is a key part of this process.

Is there a good time to apply for a credit card?

If you're trying to decide when to apply for a credit card, keep in mind that it doesn't only have to do with the time of year, but also certain life circumstances and lifestyle choices. It's a good idea to apply for a credit card when:

You want to start building credit

Using a credit card responsibly at an early age is an effective way to start building your credit early. Doing so may pay off when it comes time to rent your first apartment or even apply for a mortgage.

There are also many credit cards on the market that are specifically designed for students. It may feel intimidating to enter adulthood and apply for your first credit card, but you can apply online whenever you're ready.

If you're looking to improve your credit score and build credit, applying for a credit card may help. Using this new credit card and making on- time payments can help your credit utilization ratio, which plays a role in determining your credit score. To help improve your credit score, focus on eliminating your balance and avoid maxing out your card.

Opening a new credit card or line of credit increases your current line of credit. This gives you the chance to establish a positive payment history by paying your bill on time every month. However, missing a payment may hurt your credit score, so remember to keep making regular monthly payments.

You plan on making a big purchase

If you have a big purchase in mind and plan on financing it, applying for a credit card may help. Making a big purchase with your new credit card may earn you points and rewards, and give you the opportunity to make payments over a long period of time.

Many card issuers offer zero percent introductory APR periods that are beneficial if you plan on paying the balance before the introductory period ends. With zero percent introductory APR periods, you won't be charged interest for a certain amount of time.

Making a big purchase may also help you meet spending requirements that are required for a new cardmember bonus. These often include cash back, reward points or a credit statement.

You have debt to pay off

A balance transfer may be appealing to those who are struggling to pay off their credit card debt. If you're finding yourself in this situation, you might want to consider applying for a new credit card that has a lower interest rate or one that offers a zero percent introductory APR period and transferring your balance into one. Making payments that don't include interest may give you a boost when it comes to paying down debt.

The best time of year to apply for a credit card

Not only are there life situations when it's best to apply for a credit card, but there are also times of the year that may be more beneficial than others. If you're trying for the right time to submit that credit card application, towards the end of the year may be an exciting time to do so — and not just for the holiday season.

The end of the year is a popular time for new cardmember bonuses, also known as sign-up bonuses, to hit the market. This is typically an offer to earn rewards for spending a certain amount of money. The spending requirements take place within the first few months after opening your account. These rewards cards may offer benefits such as points, miles or cash back. Holiday expenses may help you meet these spending requirements and land that intriguing sign-up bonus.

The advantages of applying for a credit card

Credit cards may be an essential financial tool when used responsibly. Here are additional advantages to keep in mind when considering a new credit card account:

  • Convenience: When you have your credit card on hand, you don't have to worry about how much cash you have on you. Using a credit card to manage your finances may also be more convenient in terms of organization.
  • Credit card rewards: Who doesn't love rewards? Many credit cards come with the ability to earn points and rewards with each purchase you make. Different rewards programs offer a variety of perks. You may earn points that you may be able to redeem for cash back, gift cards, travel and more.
  • Fraud protection: Keeping your finances safe is part of managing your finances responsibly and safely. Fraud protection protects you from unauthorized charges on your credit card. If you notice charges that you don't recall making, many credit card issuers won't hold you accountable if you report them immediately.
  • Purchase protection: The purchase protection feature is a big advantage when it comes to credit cards. The benefit is that your eligible items that were purchased with your card may be repaired, replaced or reimbursed if it gets stolen or damaged.

Having a credit card comes with many advantages, so it's important to consider when to apply for a credit card.

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