It’s pretty tough to get by without a credit card these days. If you want to make a purchase online, rent a car, reserve a hotel or flight, you’re going to need a piece of plastic to do it. If you have bad credit, you might be afraid to apply for one – and rightfully so. If you apply for a card and get turned down, your credit score will take a hit and you’ll be even worse off.
Thankfully, there are cards out there specifically for people with poor credit who need to rebuild their credit history. What should you be looking for?
Look for a creditor that will report your good repayment behaviour to all three credit bureaus.
That is if re-establishing good credit is one of your goals (and it should be). It should go without saying, this only benefits you if you actually do make payments on time.
Go with a major creditor, like Visa or MasterCard, that will be accepted most places worldwide.
Lowest possible interest rate.
Because these cards cater to those with bad credit, the creditors offset their risk by charging much higher APR, generally between 7 – 22%. Compare cards, but know that your particular credit history may dictate your rate. The worse your credit score, the more interest you’ll pay each month.
Low or no monthly/annual fees.
Another drawback of having poor credit is that you’ll generally be charged more administrative ‘setup’ or ongoing fees.
Some cards are better than others. Often a card that charges a lower interest rate will charge higher fees.
I go with cash! Cash is King!
Forget the Credit Card.
Cash is King! In God We Trust!