When are the best and worst times to apply for a credit card?

When are the best and worst times to apply for a credit card?

The right and wrong times to apply for a new credit card might not be obvious. Here's a quick guide to help you avoid mistakes and hit the credit card sweet spot. We'll start with some of the right times to apply for a new card:

When your credit score has gone up

After a period of responsible credit use, your credit score might have gone up enough that you qualify for a card with better perks, a higher limit, a lower interest rate or one of the other advantages afforded to customers who represent less of a lending risk. If you've been carrying a lower balance or making all your payments on time, take a minute to pull your free credit score and see how you're doing.

Before a big vacation

Some hotel, airline or other travel credit cards offer monster sign-up rewards for travelers, like thousands of bonus air miles or free nights at worldwide resorts. On top of that, if your new card offers a one- or three-month spending target bonus, you can usually get most of the way there just by charging your airfare, lodging, car rental, nights out on the town or whatever necessary getaway expenses you've budgeted for.

After comparison shopping

It might be tempting to just reach for the nearest application whenever you've decided it's time for a new credit card, a little research can go a long way toward getting you a good deal. Read up on the best credit cards and learn about what sort of terms you can expect for your credit score. You may be out a couple of hours of TV-watching time, but the results of a well-informed personal finance decision are likely to be worth the investment.

That said, there are wrong times too. Try your best to avoid opening new credit during times like these:

When gearing up to apply for a mortgage or other big loan

Picture this: you're getting ready to apply for a pretty big chunk of borrowed capital and you know you'll need to put something down on the loan. Thinking ahead, you open some new credit cards to use on your everyday purchases while you sock away cash for the down payment. Imagine your surprise when -- wham! -- the bank denies your loan. Opening new lines of credit typically causes a hard inquiry on your credit, which temporarily drops your credit score.

At the retail checkout counter

There may be a way for savvy credit users to get some net benefit from of the various department store credit cards out there these days, but it's usually best practice to stay away from them. You might be able to get 10-20 percent off that day's purchases, but be prepared to face a hard credit pull, an annual fee and an APR that can get up near 30 percent in some cases.

Good timing is important for most things in life, and opening new credit cards is no different. Keep these tips in mind as you look for your next card -- you'll be glad you did.