If you have bad credit and you’re in the market for a credit card, your options are few. But with the right moves, you can find a credit card for bad credit. A bad credit credit card not only gives you access to credit, but offers a way to rebuild your credit score. An improved score translates into easier credit down the road, as well as better interest rates. Finding a credit card with bad credit is definitely tricky, but not impossible. Follow these tips and you’re on your way to better credit.
Keep Existing Accounts Current
If you have other types of accounts, such as an auto loan, student loan or home loan, pay these accounts on time each month to avoid further credit damage. Credit card issuers pull more than your credit score. They also check your credit report and review the status of your current accounts. Defaulting on existing accounts can kill your chances of a credit card approval. But if the credit card issuer sees that you’re paying all your accounts on time each month, this can sway their decision and they might approve your application for a credit card.
Start Off As an Authorized User
There is no shame in adding your name to another person’s credit card account. In fact, this is by far one of the simplest ways to find a credit card with bad credit. There is no application process and the credit card issuer will not decline the request. Although you’re granted access to use the credit card and the credit card account appears on your credit report, you are not responsible for the balance or the monthly payments.
Check the Sub Prime Market
Some banks offer unsecured credit cards to people who have bad credit. This takes research and you’ll have to contact several banks. Sub prime or bad credit credit cards have less than ideal terms. Interest rates can sit as high as 30 percent and low credit limits reduce purchasing power. But on a positive note, bad credit unsecured credit cards can help you overcome bad credit and boost your credit score. Banks that offer these cards typically report to the three major reporting agencies. Pay your balance in full each month, send your payment by the due date and you’ll earn credit score points on a consistent basis.
Go the Secured Route
There is an alternative to unsecured bad credit credit cards. If you don’t want to get stuck with a high interest rate, go for a secured credit card. A secured credit card is perfect if you have a low credit score and need to rebuild your credit. Because these credit cards require a security deposit, you’re less of a risk to the credit card issuer. Thus, secured credit cards typically feature competitive interest rates. Minimum security deposits range between $200 and $500, but you can send the credit card issuer as much as $3,000. The credit limit on your new secured credit card will correspond with your security deposit.
