Online Credit Applications – Good or Bad?

There are many different ways that you might be encouraged to apply for a credit card. You may be offered a credit card when you are out in public, such as when you are shopping at a department store that has its own card or when you’re walking around on a college campus. You might get a credit card offer in the mail that tells you that you can apply for the credit card through a mail-in response or by calling a telephone number. But the quickest and easiest want to apply for a new credit card is to go online to fill out the application

The fact that online credit applications are quick and easy is both a good thing and a bad thing. On the one hand, you’re probably going to be able to get an immediate response about whether or not you qualify for the card. This can be really beneficial to you as a card applicant, especially if you’re trying to complete transactions such as balance transfers. On the other hand, the ease of the application process makes it tempting to apply for too many cards at one time or to apply for cards that aren’t actually going to offer a great deal to you.

In order to make the most of the efficiency offered by online credit card applications, you need to be aware of the problems, tricks and traps associated with them. The first major problem is that the online application is so simple that you’re probably going to want to just keep applying to them until they won’t let you apply anymore. This isn’t good. First of all, you probably won’t get approved for multiple cards if you’re applying within a short period of time. Secondly, this is going to have an overall negative impact on your credit score because one of the factors it considers is how many recent applications you’ve made. And finally, if you do get all of those cards, you’re putting yourself in a position to accumulate a lot of debt in a short period of time which is never a good thing.

The other major problem with the efficiency of online credit card applications is that it’s really tempting to skim over the information and apply to a credit card just because it seems like a good deal. This can cause you to end up with cards that have annual fees you don’t want to pay or high interest rates that you weren’t aware of when you applied. One of the worst things that happens is that people apply for balance transfers without realizing that there’s a high fee for the transaction.

It is definitely nice that there are online applications for credit cards because they are quick and easy and make our lives simpler in a lot of ways. However, we still have to be smart consumers. When filing online applications for credit cards, it’s important to be aware of the traps. Make sure that you review all terms carefully and really think before you click that application button. And hold yourself back from making too many card applications at once.

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This entry was posted on Wednesday, June 4th, 2008 at 8:21 am and is filed under Tips & Advice. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.