Will You Get the Credit Card You Applied For?
While most credit cards have uncertainty about which interest rate you'll get, when it comes to rewards credit cards the ambiguity is even greater. Most rewards credit cards require that you have excellent credit which means a credit score at least over 720.
If your credit score is less than what the bank requires, two things can happen. If your credit is very poor, your application will likely get rejected outright. If your credit is good or fair, the bank will offer you a credit card with less desirable terms. So as the customer service rep indicated, this means getting a credit card with a higher interest rate than the minimum advertised. It also could mean that you won't get approved for a credit card with rewards, but for another card issued by the bank with fewer bells and whistles.
The good news is that you can take steps to reduce the uncertainty about which card you will get accepted for. First of all, find out what your credit score is, either by using a free FICO score estimator, or by purchasing your FICO score at myFICO.com. If your FICO score is under 720, don't go for rewards credit cards that require excellent credit; you're not likely to qualify. Instead, limit your options to rewards cards that accept people with good credit, or even those for people with fair credit, although the options will be more limited.
Also, keep in mind that interest rates will always be higher than average with a rewards credit card. So if you think you'll be carrying a balance, you're better off applying for a credit card with a lower interest rate than a rewards card. Otherwise, the added interest charges will easily outweigh the benefits you gain from rewards earnings.
What happens if you apply for a credit card appropriate for your credit rating and still don't like the terms you're offered? Well, there is a simple way out: just cancel the card by calling the card issuer and tell them that you would like to close the account.
Canceling a credit account that you have never used will not in itself hurt your credit score. You may miss out on the potential benefits you'd have gotten from adding an extra credit account and available credit line to your report. But hopefully you will find a different card with better terms that you will keep open, and that will improve your score.
Keep in mind that the hard inquiry the bank made into your credit report when you applied for the card will also cause your credit score to take a slight dip. But this will be a small effect, and a short-lived one, if you don't have any credit card debt and don't submit other credit applications over the next six to eight months.
