Credit Cards for Bad Credit

It is hard to get approved for a credit card if your credit score is low. However, you can still get a credit card even with poor credit. You have several options if your credit score is below average.

Get A Secured Credit Card

Secured credit cards are a great option for people with bad credit. Not only is it easy for you to get a secured credit card, but you can also use it to rebuild your credit. You will have to make a deposit before you can purchase anything with the credit card. Your limit will usually be equivalent to the amount that you deposit.

Secured credit cards are less of a risk to the lender. They will not lose anything if you do not pay back the credit card because you gave them a deposit.

Make a Statement

You may be able to boost your chances of getting a credit card if you include a statement with your credit report. Your statement should explain how your credit was ruined. Lenders who look at your credit may take the statement into consideration. For example, if you missed payments because of an illness, then you should put this on your credit report.

Apply for an Unsecured Credit Card

It is possible for you to get an unsecured credit card with bad credit. However, if the lender does approve you, then there are several factors that you will have to take into consideration.

  • Higher APRs- Most credit cards have a maximum APR of 25 percent. However, if you get an unsecured credit card and you have bad credit, then the interest rate may be 30 percent. The lower your credit score is, the higher the APR will be.
  • You may be charged an annual fee. Most credit cards have an annual fee. However, the benefits of having a credit card may outweigh the potential drawbacks of the fees.
  • You may be charged a processing fee. The purpose of the processing fee is to open your account and give you access to your credit.

Store Credit Cards

It is easier to get a store credit card than a regular credit card. However, store cards have a higher interest rate. You may be eligible for rewards and discounts.

Rebuilding Your Credit

If your credit score is low, then it is a good idea to focus on rebuilding it. The best thing that you can do is make all of your bill payments on time. You are charged a late payment fee every time that you miss the due date. You should put alerts in your phone to remind you to make the payments on time. You may also want to use autopay features.

You should also pay the balance in full each month. You will be charged interest on the unpaid balance. Additionally, you should never max out your credit card. Your credit score will go down. It also shows lenders that you may be going over your budget.