When is the best time to apply for a credit card? (2024)

You’ve got your eye on a new credit card, whether to build credit, earn a juicy welcome bonus or take advantage of a 0% interest period. But is it the right time to hit that “apply” button? You could face rejection — or get approved and then take on additional debt at a high interest rate. Plus, applying for new credit can temporarily hurt your credit scores. In short, it’s crucial to assess your financial situation and credit profile first. We’ll walk you through some factors to consider.

When should you apply for a new credit card?

The motivation to apply for a new credit card can be as varied as building or rebuilding your credit history, consolidating debt, seeking travel points or miles to use toward future trips or offsetting the cost of everyday purchases with cash-back rewards. Or it could be as simple as wanting an option to pay for purchases that don’t accept cash or having access to a line of credit for emergencies, such as an unexpected car or appliance repair.

Whatever the reason, you’ll want to do what you can to ensure your approval odds are high and that you’re aware of how applying for a credit card will impact your credit scores. Let’s first consider the different scenarios when applying for a new credit card can make sense.

When you turn 18

Getting an early start on your credit journey gives you time to build a solid credit history and credit scores before they’re needed. This can help you qualify for the best rates on future loans (think car loans and mortgages) and help you qualify for your first apartment or home rental.

Plus, working to build credit early allows time for your credit score to recover from newbie mistakes, like maxing out your card’s credit limit or missing a payment. Just know that to qualify for a credit card when under 21 years of age, you’ll need to have proof of income or a cosigner.

If you’re a college student, you can look at student credit cards to find the best card for your needs. And if you’re not a student, check out our list of best first credit cards to build credit.

When your credit is performing well

If you’ve responsibly managed credit cards and loans over the years, you’ll likely have a great credit score. Your reward is being a strong candidate for a wide array of credit cards with lucrative opportunities to earn welcome bonuses, cash back, miles and points.

A basic rule of thumb is to apply for new credit cards sparingly, as you’ll typically incur a hard inquiry for every application, which will knock your score down a few points each time and stay on your credit reports for two years — though the impact to your score lasts just a year.

Not sure what’s in your credit reports? Here’s how to request a free credit report so you can find out.

When you need to build or repair your credit

If you’ve made mistakes in the past and want to rebuild your credit score, a new credit card can help you — provided you handle the account responsibly by always paying in full and on time.

Offsetting negative information in your credit reports with positive information can help your credit score recover over time. You may have to start with a secured card, which requires a deposit equal to your credit limit, or a card specifically designed for people seeking to rebuild their credit. Cards with the best terms and benefits typically require good to excellent credit.

When you plan to make a big purchase

Applying for a credit card that offers a 0% intro APR on purchases can help you finance a big purchase over time with little to no interest charges. Some credit cards offer anywhere from six months of no interest to almost two years. However, once the intro APR offer expires, any unpaid balance remaining will be subject to interest charges. Just know you’ll likely need to have a good to excellent credit score (typically considered a score of 670 to 850) for approval.

Another way to take advantage of a big upcoming purchase is to use it to earn a welcome bonus. Many rewards cards require that you meet a certain spending amount in the first few months after account opening to earn a welcome bonus. Timing your card application to a big purchase that you planned to make anyway can help you meet that spending requirement.

When your debt is high interest

If you’re saddled with high-interest debt on another credit card, which inflates what you owe and makes it more difficult to pay off, you can look for a card with an intro APR on balance transfers. You’ll need good to excellent credit for approval and will likely have to pay a balance transfer fee ranging from 3% to 5%. However, once you transfer your balance to a card with no interest for a specified period of time, 100% of your payments will go toward paying down the principal debt.

Beware, any balance remaining after the intro period will be subject to your card’s ongoing APR, plus you can’t transfer balances between cards from the same issuer — i.e., from one Chase card to another Chase card. Also, it’s possible for a card to come with an intro APR on balance transfers but not purchases. That’s one reason to avoid making new purchases on a balance transfer card, with another being that you want to zero out your debt as quickly as possible.

When you’ve been referred

Many rewards cards offer a referral bonus in the form of cash, points or miles, for recommending a friend or family member to apply for the same card. If you’ve been referred for a card and are interested in applying, you may also be eligible for a welcome bonus.

Know someone with an American Express card? Here’s how the Amex Refer a Friend program works.

When you’ve been preapproved

Getting preapproved for a credit card means you most likely have solid odds of approval, so if you’ve been preapproved for a card you are interested in, go ahead and apply.

Remember that just because you’re preapproved doesn’t necessarily mean you’ll be approved, or that a particular card is one that would align best with your spending and other goals.

Some issuers allow you to check online if you’re preapproved for one or more of their cards. For example, both American Express and Capital One provide online preapproval tools.

When should you avoid applying for a new credit card?

Just because you can apply for a new credit card doesn’t mean you should. If you are working to pay off debt or build or maintain your credit score, you may want to avoid opening a new credit card for the time being.

When your current credit card balance is high

If you are already struggling to pay off what you owe in credit card balances, adding another credit card to your wallet (unless it’s a balance transfer card) will only tempt you to keep spending. In this situation, it’s best to commit to a repayment plan to get you out of debt rather than adding more to the pile of what you owe.

When you want to maintain your current credit profile

If you’ve opened one or more new credit card accounts in the past year or so, are focused on maintaining your current credit score or are planning on applying for a new loan in the upcoming months, it’s best to keep things status quo in order to keep your credit scores in a good place.

When you’re about to get a mortgage or another loan

Virtually every time you apply for a new credit card, you’ll incur a hard inquiry, which will drop your credit score a few points for a year (and stay on your credit reports for two years).

If you’re planning to get a car loan or mortgage in the near future, you’ll want to protect your credit score until the loan is secured to have the best chances of qualifying for a low rate, which means avoiding applying for any new lines of credit until after you close on the loan.

When your credit score is fair or needs improvement

Again, each time you apply for a new credit card you’ll typically incur a hard inquiry, and when your credit score is low, every point counts. If you already have a credit card, continue using it for small purchases that you pay off in full every billing statement to add that positive payment history to your credit reports until your credit score rises to a good range.

If you don’t have a credit card from which to build your credit profile, you can ask to be added as an authorized user to a family member’s card, which can help build your credit, or seek out alternative ways to build your credit before applying for a new card.

Wondering how bad a score can get? Here’s the lowest credit score possible and what it means.

When you haven’t received a preapproval offer

If your credit score is such that even the slightest ding will sink it further (below 670 is a good line to gauge this by), odds are that you likely won’t be solicited for any preapproved credit card offers until you bring your credit scores above the “fair” range (typically 580 to 669).

And, if you do receive a preapproved offer that aligns with a poor to fair credit profile, those cards may come with hefty fees, sky-high APRs and lackluster benefits. It’s better to work on improving your credit score to get more attractive credit card offers down the road.

Alternatives to getting a new credit card

Not everyone wants or needs a credit card. They can encourage overspending, make it hard to get out of debt and can be expensive if you don’t have excellent credit and you tend to carry a balance. Luckily, there are alternatives to credit cards for both daily spending and credit building.

Debit card

Debit cards withdraw directly from a checking account, thus preventing you from spending more than what you have in the account. Debit cards can be used for card-not-present transactions (such as online shopping), but come with more risk if the card is compromised through fraud as the thieves will have direct access to the money you likely need to pay rent and buy groceries. If there is a delay in getting your funds reimbursed it could cause real problems.

Also, debit card protections against fraud are not always as robust as those offered by credit cards. For example, under federal law, the maximum you’ll be liable for with a credit card if you report fraudulent use is $50 — and issuers typically offer even better protection with $0 fraud liability guarantees.

With a debit card, federal law allows you to be liable for up to $50 if you report the fraud within two business days of learning about it, up to $500 if you report it within 60 calendar days after your statement is sent to you, and an unlimited amount if you report it later than 60 calendar days after your statement is sent.

Finally, using a debit card will not build credit history.

Buy Now, Pay Later

You’ll find that many retailers offer the ability to finance a purchase over several months via a BNPL option, such as Affirm, Klarna, PayPal or Afterpay. You may have the option to pay no interest if the full amount of the purchase is paid off within a specific time frame.

However, you could incur interest charges if you don’t repay the entire purchase amount during the interest-free period. You should also expect late fees if you don’t pay on time, and your debt could be sent to a debt collector — leading to unwanted calls and a damaged credit score.

Personal loan

A personal loan can often come with a lower APR than credit cards, depending on your creditworthiness, and requires a fixed payment over a fixed period of time — which might be helpful if you think you’d fall into the trap of only making minimum payments on a credit card. You can apply for a personal loan from your bank or credit union or an online lender. Just beware that some lenders charge an origination fee based on the amount of the loan.

Peer-to-peer loans

Also called P2P loans, these nontraditional lending platforms issue loans that are funded by individuals instead of a financial institution. Some examples of P2P lenders include Prosper, Avant, Happy Money and Upstart.

To apply for such a loan, you’ll have to create an account with a P2P lender platform and share personal details, as well as what you’re seeking in a loan, and you’ll get a rating that will determine if you qualify and at what terms. If approved, you’ll be matched with an anonymous lender or lenders and be required to submit a full application.

You’ll want to stay clear of title loans, payday loans, pawn shop loans, cash advances, 401(k) loans and home equity loans for debt consolidation as they either carry sky-high interest rates or penalties or you risk losing a valuable asset if you can’t repay.