What You Need to Know About the Credit Card Approval Process

Applying for a credit card can be a little bit mysterious. First, you are asked to supply all sorts of information about yourself and your finances, before submitting your application. Then you may receive an instant approval, or you might have to wait a while to find out the bank’s decision by mail. During all this time, you aren’t given too much information.

It’s worth taking a little bit of time to try to understand this process, and learn how to increase your chances of being approved.

How the credit card approval process works

You can still apply for a credit card in a branch or by mail, but most people now choose to apply for their cards online. No matter how you choose to apply for a credit card, most applications will ask you for a variety of personal and financial details. The personal information will typically include your name, date of birth, Social Security number and whether you are a U.S. citizen. You’ll also be asked for contact information, including your street address, phone number and email address.

Next, you’ll be asked to supply financial information, including your employment status, total annual income, and possibly your monthly rent or mortgage. Some applications will also ask you about the types of bank accounts you have and how much you plan on spending on your card each month. You may also be asked if you want to add any authorized cardholders, or request a balance transfer from another credit card.

After you submit your application online, or in a branch, there’s a chance that you’ll receive immediate approval. If you don’t receive an approval shortly after submitting your application, the card issuer will give you a decision later. Not receiving instant approval doesn’t necessarily mean that your application will be denied. But if it’s denied, then the card issuer is required to send you something called an “adverse action letter” with a specific reason or reasons for your denial. If information in your credit report was part of the reason for your denial, then you’ll be informed that you can request a free copy of your credit report.

Surprisingly, the process doesn’t have to end there. Most credit card issuers will allow you to call them and ask to have your application reconsidered. This manual review process will sometimes result in the approval of a denied application simply by requesting reconsideration. Other times, you might be able to get approved by offering additional information supporting your application, such as additional sources of income that you failed to report on your initial application. Or maybe you’ve paid off debts that you had when you first applied. In fact, if you don’t get instant approval, you can even shortcut the approval process by pre-emptively contacting a card issuer’s reconsideration line before you receive a decision in the mail.

Maximizing the chance of having your application approved

Now that you know how the application process works, it helps to know a few tricks that can help your chances of approval. First, you never want to apply for a card that you have little chance of being approved for. For example, if you’ve had recent credit problems, you won’t be approved for a premium rewards card that requires applicants with excellent credit. Find out your credit score first, and only apply for cards that are designed for applicants with your credit profile.

Your debts are a key factor in your credit report, which is what issuers use to make a decision on your application. Every time a statement is generated by one of your loans, including credit cards, the amount you owe is reported to the three major consumer credit bureaus. In fact, your credit card statement balance is always reported as long-term debt, even if you always avoid interest charges by paying your balance in full.

The easiest way to reduce the amount of debt that appears on your credit report is to pay down, or pay off, your balances just before your statement closes. And if you are applying for a new account from a card issuer with which you already have several accounts, make sure to pay down as much of those balances as possible before applying.

Finally, be sure to indicate all of the possible sources of income that you can use on a credit card application. For example, you can include child support, Social Security, disability and alimony payments. Non-working spouses can also include their spouse's income so long as they have a reasonable expectation of access to these funds for the purpose of repaying a loan.

Bottom line

The credit card application process is not that simple, but it’s worth learning. By understanding how this process works, and what you can do to increase your chances of approval, you’ll feel a lot more comfortable applying for your next credit card.

First published May 21, 2018, last updated July 28, 2021

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