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When's the best time to apply for a credit card?

Picking the right time to apply a credit card may seem insignificant, but you can avoid a lot of headaches by timing your credit application wisely.

By Aug 5, 2013 11:34AM

This post comes from Jason Steele at partner site logoThere is no doubt that Americans are bombarded by credit card offers throughout their day.

Serious Man Examining a Bill © Digital Vision, Getty ImagesThese applications for new cards appear at retailers, on airplanes, in the mail, and of course, right here on the Internet. With no shortage of opportunities, credit card users are left with the question: When is the ideal time to apply for a credit card?

Here are a few guidelines:

1. After you have done your research.
As with any important financial decision, credit card users will want to do enough research to ensure that they are receiving the best offer available. 

For example, cardholders with debt will want to find a card with the lowest possible interest rate, while rewards card users will seek out the best sign-up bonus, benefits and return on spending.

2. Before financing a large purchase.
Credit card users who will need to finance a larger purchase are much better off applying for a new card with 0% annual percentage rate promotional financing beforehand. Most of these offers include interest-free financing on both new purchases and balance transfers, but nearly all cards require a 3% balance transfer fee. Therefore, credit card users who receive one of these offers first can utilize the financing on new purchases without paying the balance transfer fee.

3. When an exceptional sign-up bonus is offered.
From time to time, credit card issuers tempt applicants with some truly amazing sign-up bonuses. For example, Chase frequently offers 50,000 bonus points for its Southwest Airlines card, American Express sometimes features 75,000 Membership Rewards points for its Premier Rewards Gold card, and on several occasions Chase has offered 100,000 Avios reward points for new applicants to its British Airways card. These bonuses, worth between $800 and potentially thousands of dollars of award travel, represent double or even triple the amount of their standard offers.

4. After your credit improves.
If you are a credit card user, and have had past trouble with your credit, you are probably stuck using a card with high interest rates and few rewards. But once your credit score rebounds, it may be time to upgrade to a card with more competitive terms and benefits.  In fact, cardholders can start by simply calling their existing card issuers and requesting better terms.

5. Before you leave your job.
Whether you just received a layoff notice, are leaving your job to start your own company, or just taking some time out of your career, you will qualify for better terms if you are employed when you apply. Nevertheless, cardholders should be careful not to utilize this loophole to incur debt when they can least afford to.

6. After (not before) you close on a mortgage.
A home mortgage is the largest loan that most people will ever apply for. Therefore, credit card users should take every possible measure to make sure their credit history is excellent before they apply for their mortgage. This means refraining from opening up new lines of credit such as applying for a credit card.
By carefully considering when to apply for a new card, and when to avoid doing so, credit card users can make the best decisions for their individual needs.

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