Sometimes bad credit is a result of poor money management. Others, it’s due to job loss, illness, or other circumstances beyond one’s control. But whatever the reason may be, having bad credit can make life a lot more difficult. Those who wish to rebuild their credit may have a hard time doing so because they won’t qualify for most loans and credit cards.
Fortunately, there are credit cards out there designed for those with bad credit. Their interest rates and fees are often higher, but once you’ve established a good record with them, you’ll be more likely to qualify for cards with more favorable terms.
Here is some advice and things to know about credit cards for people with bad credit.
Some retail stores will give store credit cards to those with less than perfect credit. You’ll only be able to use them at the issuing merchant, so be sure to apply for one at a store where you already shop. Make a small purchase each month and pay the balance off in full every time, and before long you’ll see an improvement in your credit score.
If you have a good history with your bank, consider applying for a credit card with them. Banks are often more willing to take a chance on current customers than new customers in an effort to keep their business.
Apply for a “bad credit” credit card. If you qualify, your annual fee and APR will be based on your credit score. And for those who do not qualify for a standard credit card, banks that offer bad credit credit cards generally also offer secured credit cards (see below).
If you do not qualify for a regular credit card, a secured credit card can help you rebuild your credit. This type of card requires you to make a deposit of your own money, which will be refunded after a period of time if you keep your payments up to date, or in some cases when you close the account. Your credit limit is often equal to your deposit, but it may be higher in some cases.
If you’re just looking for a card to use for things like online purchases and bill paying, a prepaid card might suit your needs. These cards work in much the same way as bank debit cards. You deposit your money into the account, and the amount of each purchase comes out of your available balance. Some such cards offer perks such as free direct deposit, low or no monthly fees and online or in-store reloading.
Bad credit doesn’t necessarily doom you to a life with no credit cards. There are many options available for those who have had credit problems but wish to turn over a new leaf. As long as you keep your account current, these credit cards can help you get back on track and qualify for the credit you need.
Sometimes bad credit is a result of poor money management. Others, it’s due to job loss, illness, or other circumstances beyond one’s control. But whatever the reason may be, having bad credit can make life a lot more difficult. Those who wish to rebuild their credit may have a hard time doing so because they won’t qualify for most loans and credit cards.