In the United States, 83% of people between the ages of 30 and 49 have at least one credit card. The use of this is increasing due to the fact that it is a resource that, well used, helps the holder so that his money performs better while acquiring more products and services that he could not pay without the benefits of the card.
The main advantage, unlike debit cards, is being able to access a kind of loan quickly to divide the payments of a purchase, sometimes without interest, so as not to part with all your money. You just have to take care that this advantage does not become a disadvantage by acquiring something that cannot be paid for.
How to process a credit card in the United States?
Processing a credit card in the United States is particularly straightforward due to the market expansion mentioned above. The steps to follow are basically summarized in four:
The first step is to check the credit score. In the United States there are credit agencies that give scores to people’s credit history, these agencies receive information from financial institutions. You are reviewing and reporting the data and assigning the score accordingly.
- Obviously the better the score, the more likely the card will be approved and higher amounts will be received. For New users with no history they are usually given low initial credits, and for those with bad history it will be more difficult to obtain a card, that’s what bad credit cards are for.
The second step is to determine the type of card that is needed. That is, choose one of the types of cards explained above. New users are encouraged to start with low-interest-rate, annuity cards. If you already have a history, it will be easier to choose between one of the types of cards that have already been reviewed.
The third step is to choose the financial institution in which the card is to be applied for. If you already have a bank account, it will be easier and faster for the card to be granted because there is already history with the bank and the user can already determine if they want to continue with that bank or not. For the new ones it will be more necessary to compare options.
The fourth step is to apply for the card with the bank. This can be done by phone, online or by going directly to a bank branch. Some banks with which you already have a history offer you pre-approved cards, you just have to fill out a form. Normally the data that will be requested are:
- Contact information: name, address, telephone, email, etc.
- Financial data: employment status, annual or monthly income, existence of savings, debts, etc.
- Security data: social security number, age, answer if you are American or not, etc.
Then it only remains to wait for the calculations to be made and the history reviewed, the card approved and collected at the bank when indicated, if it is rejected the most common reason is due to bad history. If it is already pre-approved it will be delivered to you much faster.
Do I have to have a minimum monthly income to process a credit card in the United States?
In the United States, the income is requested to calculate the credit limit and interest, but it is not a factor that determines whether a card is approved or rejected. Therefore, there is no minimum income required, more importantly the DTI (Debt-To-Income Ratio), which refers to the percentage of income that is used to pay debts.
In short, financial institutions pay more attention to the debt that the applicant already has to know if he has the ability to pay the card, the income is requested to make the calculation of this, but not to reject or accept the application .
What you should know about credit cards in the United States
What is the current state of the credit card market in the United States?
The credit card market in the United States is dominated by just a handful of companies, and has grown a lot in recent years. In 2016, 37.3 billion credit card transactions were made, and in 2017 the figure rose to 40.8 billion according to data from the FED (Federal Reserve System).
One of the reasons for the increase in the use of credit cards in the United States is that there are different types with different purposes and conditions, that is why it is very common for people in this country to have more than one credit card, to take advantage of the benefits of each in each purchase.
The credit card in the United States is the preferred method of payment for people who earn $ 100,000 or more a year. Total credit card debt increased by $ 231 billion in the last 7 years, being 2018 when the maximum of $ 799 billion was reached, a figure that will surely be exceeded in this
What are the advantages of a credit card in the United States?
The main advantage that these credit cards offer is the ability to defer payments for a purchase and not pay a large sum of money at once and even the possibility of obtaining a product or service before being able to pay for it. It also gives the possibility of generating a good record to obtain better credits in the future.
However, all the advantages depend on a good use of the card, misjudging the possibilities of payment and being late in these, can turn the advantages into disadvantages, such as debts that grow and accumulate quickly. In addition, some may have restricted access to certain establishments.