Credit card application tips

12 tips to increase your chances of approval when applying for a new credit card.

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While applying for a credit card doesn’t have to be complicated, it can come with certain risks. After you’ve applied for a card, the credit card provider will look at your income, credit history and the documents you’ve provided in your application to determine whether you’re a high or low-risk applicant. Essentially, they’re looking for signs that demonstrate that you’re a low-risk borrower that has the ability to repay your balance.

Use this guide for 12 tips to increase your chances of approval, including what to do before you apply and submit your application and mistakes to avoid when requesting a new credit card.

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What to do before you apply for a new credit card

The pre-application process is considerably more important than the act of applying itself. While it may take only 15 minutes to fill out the form, getting your affairs in order so that you’re ready for the provider’s assessment of your application will take a bit more time and preparation.

Tip #1. Take your time

It’s never a good idea to rush into things, and it is your right as a consumer to assess the bank before it assesses you. Don’t jump at the first credit card deal you see. Instead, spend some time comparing your credit card options so you can find a card that suits your financial needs and spending habits.

Tip #2. Know your needs

There are many different types of credit cards on the market that suit a variety of cardholders. Before you begin your search, spend some time considering what you want, need and can afford with your next credit card.

Tip #3: Compare your options

Once you’ve decided what type of card you want, it’s time to begin comparing your options.

What do I need to compare?

  • Interest rates on purchases, cash advances and balance transfers
  • Annual fees
  • Interest-free periods
  • Rewards programs including the partnered program, earn rates and how you can earn and redeem points
  • Complimentary insurances including travel insurance, purchase protection and extended warranty coverage
  • Additional cardholders and whether additional cards come with a fee
  • Extra benefits such as concierge services and airline lounge passes that’ll help you offset the costs of the card

Comparing your credit card options will help you narrow down your search and ensure that you’re selecting a card based on an informed decision.

Tip #4: Check the eligibility requirements

You’ll need to meet the eligibility requirements to be approved for any credit card you apply for. Make sure you confirm that you meet the criteria before you submit your application, as rejected credit card applications can have a negative impact on your credit score.

Credit card eligibility requirements

While requirements can differ between cards, they usually include:

  • Age. Be at least 18 years of age, or the age of majority in your province or territory.
  • Residential status. Be a Canadian citizen or a permanent resident with a valid Canadian address.
  • Good credit history. You’ll need to have a good credit history with no defaults or evidence of bankruptcy.

Tip #5: Check and improve your credit rating

Banks typically use a credit rating system when assessing your eligibility for the card and card limit in question. Based on your credit history, repayment habits and current credit lines, the provider will work out how much you can safely borrow. This information is available to providers whenever you apply for any form of credit, but also to you at any time.

You can request a copy of your credit report before applying from one of the two credit bureaus in Canada: Equifax and TransUnion. Doing this can allow you to correct any possible errors on your report and see exactly what the bank will be seeing when they assess your application. If the report is less than ideal, it may be wise to delay your application and spend some time improving your credit score to increase your chances of future card approval.

Tip #6: Lower your credit utilization ratio

If you already have a credit card balance, it’s wise to pay off your existing balances before submitting a new credit card application. This is because having a high debt utilization ratio is a poor indication of credit-worthiness and reduces the likelihood of a successful application.

  • To calculate your ratio, divide the total current balances on your cards by their total limits.

How to lower your credit utilization ratio

For example, if the limits on your three cards are $5,000 each, and you have a $4,000 balance on each of them, your ratio is $12,000/$15,000 = 80%. A healthy ratio is typically 30% or less. If you’re struggling to repay your debts because of high-interest rates, consider consolidating your debt with a 0% balance transfer credit card.

Tip #7: Bank with your credit card provider-to-be

Opening a savings account or debit account with the bank you’re applying for the credit card with could help with the application process.

  • Firstly, it will significantly speed up your application, because you’re an existing customer and the bank has already verified that you are a legitimate customer.
  • If you have a chequings or savings account with them where your salary is deposited monthly, it proves that you have a regular income.
  • If you apply online via internet banking, your application will speed up even more because your details will usually already be pre-populated on the forms.

As long as you meet the eligibility requirements, existing customers can sometimes get approved quicker than other applicants without the hassle of providing further documentation.

Compare credit cards

Name Product Purchase Interest Rate Cash Advance Rate Annual Fee Minimum Income Benefits with this card Description
American Express Cobalt Card
19.99%
22.99%
$120
N/A
Earn 5 Membership Rewards points per $1 spent at eligible grocery stores, restaurants, bars, cafés and food delivery services, and earn 2 Membership Rewards points per $1 spent at eligible gas stations, and on transit and travel purchases, and earn 1 Membership Rewards point per $1 spent elsewhere. Terms apply
Earn up to 40,000 Membership Rewards points. In the first year, earn 2,500 Membership Rewards points for each billing period when you charge at least $500 in eligible purchases to your card (for a total earn of up to 30,000 Membership Rewards). Plus, earn up to 10,000 Membership Rewards points when you spend a total of $3,000 in purchases in your first three months
HSBC +Rewards™ Mastercard®
11.9%
11.9%
$0 annual fee for the first year ($25 thereafter)
N/A
Earn 2 Points for every $1 spent on eligible dining or entertainment purchases.
Earn 10,000 Points ($50 travel value). Plus, get a full annual fee rebate for the Primary Cardholder for the first year. Apply by June 29, 2020. This offer is only available to residents of Canada other than the province of Quebec. Conditions apply.
BMO World Elite Mastercard
19.99%
22.99%
$0 annual fee for the first year ($150 thereafter)
$80,000
Get 3 BMO Rewards points per $1 spent on eligible travel, dining and entertainment purchases (up to $50,000 spend annually), and get 2 BMO Rewards points per $1 spent on all other eligible purchases (and once you reach the $50,000 annual spend).
Earn a bonus of up to 35,000 BMO Rewards points with a minimum spend of $3,000 on eligible purchases in the first three months of card membership ($250 travel value to be used towards a flight booked through bmorewards.com). Plus, get the $150 annual fee waived in the first year.
HSBC World Elite® Mastercard®
19.9%
22.9%
$0 annual fee for the first year ($149 thereafter)
$80,000
Earn 3% in travel rewards on all eligible travel purchases (6 Points per $1 spent) and earn 1.5% in travel rewards on all other eligible purchases (3 Points per $1 spent).
Earn up to 60,000 Points ($300 travel value). Plus, get a full annual fee rebate for the Primary Cardholder for the first year. Apply by June 29, 2020. This offer is only available to residents of Canada other than the province of Quebec. Conditions apply.
Scotiabank Passport  Visa Infinite Card
19.99%
22.99%
$139
$60,000
Earn 2 Scotia Rewards points for every $1 spent on eligible grocery store, dining, entertainment and daily transit purchases, and earn 1 Scotia Rewards point for every $1 spent elsewhere.
Earn up to a total bonus of 40,000 Scotia Rewards points (up to a $400 travel value) in your first year. Earn 30,000 Bonus Scotia Rewards points when you spend at least $1,000 on eligible purchases within the first three months. Apply by July 1, 2020. Plus, earn 10,000 Bonus Scotia Rewards points each year when you spend at least $40,000 annually on eligible purchases (and earn 2,000 Bonus Scotia Rewards points for every additional $10,000 in purchases thereafter).
BMO Preferred Rate Mastercard
12.99%
12.99%
$20
$15,000
Take advantage of an introductory balance transfer offer, annual fee waiver in the first year, and low purchase and cash advance interest rates.
Get a rate of 3.99% on balance transfers for 9 months with a 1% transfer fee. Plus, get the $20 annual fee waived in the first year.
Scotia Momentum No-Fee Visa Card
7.99% intro APR for the first 6 months, 19.99% thereafter
22.99%
$0
$12,000
Get 1% cash back on all eligible gas station, grocery store and drug store purchases and recurring bill payments, and get 0.5% cash back on all other eligible purchases.
Get a 7.99% introductory interest rate on all eligible purchases for the first 6 months. Apply by July 1, 2020.
The Platinum Card from American Express
N/A
N/A
$699
N/A
Earn 3 Membership Rewards points for every $1 spent on eligible dining in Canada, 2 Membership Rewards points for every $1 spent on eligible travel purchases as well as hotel and car rental bookings made with American Express Travel, and earn 1 Membership Reward point for every $1 spent on all other eligible purchases
As a new Platinum Cardmember, earn up to 60,000 Membership Rewards points in the fist six months. Earn a Welcome Bonus of 50,000 Membership Rewards points when you spend at least $3,000 on eligible purchases within the first three months. Receive an additional 10,000 Membership Rewards points after six months of cardmembership
American Express AIR MILES Platinum Credit Card
20.99%
22.99%
$120
N/A
Earn 1 AIR MILE for every $5 spent on eligible food, drink, gas and transit purchases (up to an annual spend of $30,000), and earn 1 AIR MILE for every $10 spent on all other eligible purchases (and after the $30,000 annual spend)
Earn a Welcome Bonus of 2,000 AIR MILES when you spend at least $1,500 in eligible purchases within the first three months.
American Express Business Edge Card
19.99%
22.99%
$99
N/A
Earn 3 Membership Rewards points for every $1 spent on eligible business essentials including office supplies, electronics, rides, gas, eats and drinks (up to an annual earn of 75,000 Membership Rewards), and earn 1 Membership Reward point for every $1 spent on all other eligible purchases
Earn up to 42,000 Membership Rewards points in your first year. Earn a Welcome Bonus of 30,000 Membership Rewards points when you spend at least $5,000 on eligible purchases within the first three months, and earn 1,000 Membership Rewards points each month (a total of 12,000 annually) when you spend a minimum of $3,000 on eligible purchases
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Compare up to 4 providers

*The products compared on this page are chosen from a range of offers available to us and are not representative of all the products available in the market. There is no perfect order or perfect ranking system for the products we list on our Site, so we provide you with the functionality to self-select, re-order and compare products. The initial display order is influenced by a range of factors including conversion rates, product costs and commercial arrangements, so please don't interpret the listing order as an endorsement or recommendation from us. We're happy to provide you with the tools you need to make better decisions, but we'd like you to make your own decisions and compare and assess products based on your own preferences, circumstances and needs.

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Tips to remember during the application process

Once you’ve done research, checked the eligibility requirements and selected a card, you can apply for your chosen credit card. While filling out your application, keep the following tips in mind:

Tip #8: Be careful with the details

You’ll be asked to provide a lot of information during your application including addresses, contact numbers, current and previous employment, salary, outstanding debts and monthly expenses (just to name a few). While it might seem like a lot of information, it’s important to fill it out correctly and double check it before submitting the application.

Mistakes on your application could slow down the process or result in a rejected application. For instance, if you omit details of an outstanding balance and the bank later finds it on your credit file, they could think you’re trying to hide the debt from them and could decline your application.

Tip #9: Organize the required documents>

As well as eligibility requirements, you’ll be required to provide a number of documents with your application. Supporting documents you’ll typically be asked for include your passport, driver’s license, proof of residential status, recent paycheques and your last tax return. Make sure you confirm what you need to provide before you start the application to ensure a swift and successful application.

Tip #10: State your actual income

This is no time to be modest or to exaggerate your income. Deflating your income may sabotage your application by reducing the bank’s opinion of your ability to finance a debt. If you have multiple sources of income (such as from part-time employment, freelance jobs or government payments), make sure to include these details. Fabricating or inflating your income, on the other hand, is considered fraud and punishable by law.

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Mistakes to avoid when applying for a credit card

Aside from the tips to follow before and during your application, the following are common mistakes to avoid if you want to increase your chances of approval.

Tip #11: Don’t apply for multiple cards at once

You may be tempted to apply for a second card just in case your first one doesn’t get approved, but don’t. Each credit inquiry that a provider makes about your credit history leaves a new mark on your credit file. If you apply for many cards at once or during the same period, it would appear to every subsequent provider that you have a lot of debt, even if that isn’t true. This could leave you in a vicious cycle of applying for credit cards and not having them approved.

In fact, some banks will automatically reject your application if you’ve recently applied for a credit card. It’s best to apply for one card, and if rejected, wait a few weeks or months before applying for another.

Tip #12: Be careful with balance transfers

In order to do a balance transfer, you’ll have to turn to a provider that you don’t currently bank with. A bank that you currently do business with will not compete against itself and give you a balance transfer offer, which means you will need to turn to a provider who you don’t have a history with. You can learn more about balance transfers in our guide here.

Applying for a credit card is a relatively simple process and can take as little as 15 minutes. However, if you don’t do your research beforehand, ensure you meet the eligibility requirements and prepare the necessary documents, you’ll reduce your chances of approval and increase the time it takes to complete your application. As long as you follow the above tips, you should have no trouble applying for your next credit card.Back to topPictures: Shutterstock

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