How to Get Approved For a $500 Credit Card
There are multiple reasons why people seek low-limit credit cards. The most obvious reason is that it may be easier to get approved for a credit card with $500 credit limit rather than $10,000. Banks have their own rules in determining the maximum amount of money you can charge, but most of them review your credit report, credit score, and income. As such, some people only get approved for a lower limit while others receive a higher one.
But having a $500 credit card is not a bad idea. A higher credit limit can be stressful. Besides, it is time to appreciate the low limit credit cards and utilize them more. For starters, it is a fantastic option for people who have no credit history or damaged credit history. By starting with a small amount, you can prove your ability to manage credit by making timely payments and managing your credit limit. The risks are lower. Your bank will not have to worry about you maxing out your card only to default.
It is easier to stay on budget, too. If you have problems controlling your spending, a $500 credit card can help you stay on track. For example, you can use this card specifically for grocery shopping. At the end of the month, check how much you spent. You will quickly notice if you are overspending.
How to get approved for a low limit credit card
There are several ways to secure a $500 credit card. The first one is convenient: no need to apply for a new card. Just call your current credit card company and request for a lower limit.
The next option is to apply for credit cards with lower limits such as starter or subprime credit cards. Getting a secured credit card is also possible but you must pay off the security deposit to open the account.
If you have good credit, you can call your provider and ask if they have credit cards targeted to those with excellent credit scores and ask for a lower limit. Starting the conversation over the phone makes the application process easier. You save time and learn your options faster.
Managing your $500 credit card
To improve your credit score, you must manage your low limit credit card effectively. The simplest thing you can do is to make every payment on time. Your payment history is the largest factor in your credit score. To avoid missing payments, consider setting up automatic payments or create reminders in your calendar. This really makes a big difference.
Further, make an effort to avoid having a high utilization ratio reflected on your credit report. Make payments to lower your balance before your statement is issued. This is the second largest factor in your credit score – do not mess it up!
After you show you can manage a low limit card, issuers are more likely to raise your credit limit. Be on the lookout for the notification that may come in the mail or printed on your credit card statement. If you are unsure, call them to inquire or make a request. You can move on to higher limit cards if your financial habits prove healthy. If you become uncomfortable, don’t worry because you can always go back and get a $500 credit card again!