Credit cards can be an important weapon in your financial arsenal -- when used responsibly. They come with plenty of benefits, including cash back, points and travel rewards. They can also guard you from identity theft and extend protections on your purchases -- and they can help boost your credit score.

We'll help you decide how to select , apply for a credit card and increase your chances of being approved.

How credit cards work

Let's start with the basics. When you use a credit card, you're tapping into a line of credit from your credit card provider. You can use your credit card for everyday expenses, but we recommend only charging purchases that you can afford to pay off in full at the end of each month, so you don't accumulate high interest charges. 

Each credit card has a set billing cycle, typically around 30 days. After your billing cycle ends, you'll have a grace period during which you can pay off your purchases without accruing interest. If you don't pay the entire balance before the due date, all purchases from the previous billing cycle will begin accruing interest based on your annual percentage rate, or APR. Credit cards are notorious for carrying high APRs, so you'll want to factor credit card payments into your budget to avoid racking up debt.

Key credit card terms to understand:

As you look into individual credit card offers, you'll see a handful of common terms that will be helpful to know ahead of time.

If you're ready to apply for a credit card, understanding credit scores and the different types of credit cards will also be helpful.

Understanding your credit score

A credit score is a three-digit number distilled from your outstanding debts and how you manage them. It lets lenders know how risky it is to lend you money.

When you apply for a credit product -- whether it be a mortgage, credit card or personal loan -- the lender will check your credit reports and score to see if you're a good investment. A bad credit score could lead to you being denied, while a good credit score increases your chances of being approved with generous terms. A credit score is essentially a way for lenders to see how responsible you are at managing debt.

There are a number of ways for you to check your credit score. You can utilize free services through certain credit card issuers like Capital One or American Express. You're also able to request your credit score once per year from each of the three major credit bureaus, Equifax, TransUnion and Experian.

Your credit score -- whether it's your FICO score or VantageScore -- is broken up into a few different ranges. Take a look:

Credit score ranges

Find the right card

Before applying for a credit card, be sure to research and find the right one for you. There are different card types to choose from, and it's essential to know how each one benefits you.

Key things to consider when choosing a credit card

Here are a few things to keep in mind when deciding which credit card you'd like to apply for.

It's a good idea to tailored to your spending habits.. For instance, if you travel frequently, forex strategies consider a that can then be used to fund your travels.

Look for preapproval offers

are targeted, which means they've been picked for you . Simply put, applying for one of these cards may give you a better chance of qualifying. 

Preapproval offers often offer  in the form of points, gift cards or cash-back rewards.

Although preapproval offers are targeted, they don't guarantee approval. Once you apply, a . If a derogatory mark is found that doesn't fit the lender's criteria, you could be denied.

Lastly, don't just apply for a card because you have a better chance of being approved -- make sure it fits your financial goals and offers the rewards you're looking to earn.

Be prepared for a credit hit

When you apply for a credit card, it appears as a hard inquiry on your credit report for two years. If you're applying for more than one credit account, you might be worried about multiple hard inquiries. 

You can limit inquiries by applying for all new accounts within a 14-day window. Any accounts you apply for during this time will show up as one single hard inquiry, rather than multiple. A hard inquiry stays on your credit report for two years, but it can only negatively impact your score for up to a year, according to Experian.

That said, a new credit card can impact your score for other reasons. Opening a new credit card reduces your average age of credit, which can lower your credit score. 

The good news is that the negative impacts of a new credit card are likely to be temporary, while the positive effects can be long-term. A new credit card increases your total credit limit and reduces your credit utilization, an important factor in determining your score.

Have a repayment strategy

Before applying for a credit card, have a strategy in mind to avoid paying high interest charges since these can completely negate the financial benefits of the card.

The best strategy, of course, is to pay your card off in full on your due date each month. Enrolling in AutoPay is a good way to ensure you pay off your entire balance -- or at least the minimum balance due on time every month.

What you'll need to apply for a credit card

To determine if you qualify for a credit card, companies will look at your financial information and decide if you're a good candidate. They'll need your:

Using your Social Security number, the credit card company will run a hard inquiry to determine if your credit report and score qualify you for a card. They'll also look at your debt-to-income ratio, which is the percentage of your monthly income that goes toward debt. You can calculate your DTI by dividing your monthly debt payments by your monthly pretax salary. The higher your DTI, the lower your chances of qualifying for a card.

Credit card applications are filled out primarily online today, but some companies still allow you to apply via mail or over the phone.

What to do if your application is declined

If your application is denied, the lender is required to provide you with the reasons why under the . Once you know why, you can work on improving your credit, paying down debt and, when you're ready, applying for a card that fits your credit profile.  

Improve your chances of getting approved for a credit card

If you were or want to ensure that your chances of approval are higher, you should start by reviewing your credit report. Work on any derogatory marks, like late payments or accounts in collections right away. Use features like AutoPay to ensure your credit cards are paid on time every month.

For those with no credit history, you might consider becoming an authorized user on a responsible friend or family member's credit card. This can help you quickly build credit so you can apply for your own card.

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