What is the Best Credit Card for You

by : Craig Thornburrow

Everyone knows that the credit card market has tightened so it is important that when you are looking for a new card that you only apply for the best credit card for your specific situation. To make sure that you are going to be approved for the credit card it is important that you understand your needs and your credit score. The FICO score is how most credit card companies determine first if you will be approved and second what your credit limit will be.

The last thing that you want to do is apply for a card that you have very little chance of being approved for. Each time you do this you lower your credit score making you a less attractive prospect for credit. So take an honest look at your credit first and apply for only the best credit card for your situation. For example, if you have an excellent credit rating you can apply for and get approved for almost any card. However if you have a poor credit rating then you are going to really need to read the card company's specification about who can get accepted for their cards.

Here is what many of the companies are looking for in a credit prospect. First, they want to see if you are a stable person. They will check this in two ways. First they are going to look at your employment history; they want to see that you have worked for the same employer for over one year. Next, they are going to look at your home addresses; they are looking to see if you have lived in the same home for over two years. If you are constantly changing jobs or moving this sends up a "red flag" and many companies will steer clear of you.

The next thing they will be looking at is the amount of debt you are currently carrying. This means that when they look at your credit report they will look at the balances of all your accounts. If you have very high balances in ratio to your credit limits this is going to scare off a lot of companies. For example if you have several credit cards that are very close to their credit limits, credit card companies will frown on this. Your cards should have less than 30% owed on them in this current credit environment.

Another thing that they will look at is how much credit you have access to. For example let's say that you have a home equity line of credit for $150,000 and 5 credit cards with $15,000 credit limits and you currently have no outstanding balances, that means that if you went crazy and spent to where you were maxed out you would have access to $225,000! So the lender you are applying to will weigh your access to your ability to make payments on it. So when you are ready to apply for a new credit card it is important to apply for the best credit card for you unique situation.