Should I get a credit card?

Deciding when to apply for a credit card often comes down to timing. But how do you know when it’s a good time to apply for a credit card or when you should wait? 

What you’ll learn:

• Whether it’s the right time to get a credit card is ultimately up to you.

• Issuers often use hard credit inquiries to judge credit card applications, and these inquiries can cause slight dips in credit scores. 

• It could be a good time to apply for a credit card if you want to build credit with responsible use, finance purchases, consolidate debt or earn rewards.

• If you struggle with overspending, if you’re planning to apply for a mortgage or if you’ve had multiple hard credit inquiries recently, it might be better to wait to apply for a credit card.

There’s no one-size-fits-all answer, but applying for a new credit card could make sense in situations like these:

Credit history is a factor that affects credit scores. And according to the Consumer Financial Protection Bureau (CFPB), using a credit card responsibly can be a key part of building and improving credit. When it comes to responsible use, that means doing things like paying statements on time every month and staying below credit limits.

It’s worth noting that credit card issuers typically use a hard credit inquiry to judge credit card applications. And those inquiries can temporarily lower your credit scores.

One way to avoid unnecessary hard inquiries at Capital One is to check whether you’re pre-approved. It’s a great way to get an idea of which cards you might be approved for, and checking won’t hurt your credit scores.

If you’re considering a credit card, rewards are one thing you can use to compare potential cards. Rewards currencies (miles, cash back and points), earn rates and new cardholder bonuses vary from card to card. 

If a card has an annual fee, the CFPB says to “compare the value of rewards you expect to receive (and use) each year with the annual fee you might pay.” Beyond rewards, the agency also says annual percentage rates (ARPs), fees and other terms are worth comparing.

Using a credit card to make a major purchase, such as a large appliance, a piece of furniture or a trip, can allow you to pay over time. And if you’re approved for a credit card with a low introductory rate, you might be able to reduce or avoid interest if you pay the balance before the promotional period ends.

It can also be helpful to have a credit card for unexpected expenses or emergencies.

If you’re making multiple credit card payments each month, you might be able to combine them into one monthly payment by using a balance transfer. If the APR on a new credit card is lower, it could simplify and lower your monthly payments. 

Credit card debt consolidation won’t eliminate your debt. And depending on the terms of the balance transfer, there’s a chance you could end up paying more in the end because of fees, interest and other factors.

Getting a credit card might not be the best choice now. Here are scenarios when it might make sense to wait: 

Budgeting with a credit card is one way to stay on top of your payments and keep your balance down. Reviewing your credit card statement can help you keep tabs on your spending habits and understand where your money is going each month. You can then use that information to create a realistic budget. 

But it might be better to wait on applying for a card if you’re concerned about paying your balance each month or how carrying a balance on a card could create more debt.

According to the CFPB, if you’re planning to apply for a mortgage or car loan, you might want to wait before applying for a credit card to avoid hard inquiries and temporary dips in your credit scores, which could keep you from getting the best terms possible on the loan.

But when it comes to mortgages, the CFPB’s guidance is a little different. It says shopping around won’t hurt your credit scores because “within a 45-day window, multiple credit checks from mortgage lenders are recorded on your credit report as a single inquiry.”

If you’ve recently applied for other loans or credit cards and been declined, it might be better to wait and work on improving your credit scores, because multiple hard inquiries in a short period of time could negatively affect your credit scores.

Whether it’s the right time to get a credit card is ultimately up to you. You could start by doing your research, thinking about your finances and comparing potential credit card options.

If you decide that you’re ready for a new credit card, you can see whether you’re pre-approved for a Capital One credit card without harming your credit scores.