Applying for credit cards has never been easier thanks to the prevalence of online applications and big-box retailer cards. While they’re easy to apply for, qualifying for a good card can be tricky. When you apply, the credit company will check your credit score to see if you are eligible for the card in question. Simply put, the better the card is the harder it is to qualify for it. Building credit can take time, so you may end up with a less than perfect card to begin with. It’s important to understand a few of the key things that your credit score might have an impact on when it comes to your credit cards.
The most obvious thing that your credit and financial history will affect is the interest rate of your card. The best credit cards have fairly low interest rates. The worse your credit history is, the higher the interest rate on a credit card will likely be. Note that while an individual card’s interest rate won’t necessarily adjust based on your history, you simply won’t be able to qualify for the cards with the better rates. In other words, you may only be able to get a card with a very high interest rate due to your history.
Additionally, you may end up only able to get credit cards with high annual fees or startup fees. Those with great credit can usually secure a card that lacks any kind of annual fee, while those with worse credit normally end up having to pay out at least an annual fee and perhaps even a startup fee. In some cases you’ll only be able to get a secured card, or a prepaid one. In these cases you’ll actually give the company your funds and they’ll extend credit based on that. It’s a good way to build your credit, but it will cost you.
Finally, realize that with a bad credit history the odds are you’ll only be able to get a basic type of card. There are credit cards with rewards like bonus points, cash back, airline miles, and more. But if your credit is less than stellar, the odds are you’ll be missing out on all of these. Simply put, your credit history will have a profound impact on your ability to apply for and receive the best credit cards on the market. You’ll still have options, but don’t expect the best if your financial history isn’t up to par.