If your credit is less than perfect, you can still obtain a credit card. The card you get may not have all the perks you would like, and you will probably have to jump through more hoops than someone with a 700 plus FICO score, but it is possible. In order to figure out how to get a credit card even with bad credit you will need to know why your credit is poor to begin with, what your options are for getting a new card, and whether or not this is the right time for you to get a new credit card.
First of all, you need to know why you are in a position of having poor credit to being with. Is it the result of a job loss, reduced income, a divorce, or merely poor money management on your part? Being able to answer this question honestly will help you to determine where to look for a credit card and what type of card will work best for your needs, and in your life.
The next step is to be aware of the types of credit cards that are available for people with bad credit. There are a few different options here. One is that a company will offer you a credit card with a very high interest rate and a very low spending limit. This makes sense, since they consider you a high risk applicant. So they will want to make as much money off of your interest payments as they can, and take on the lowest amount of risk in case you don’t pay off your debts.
The danger with this is that if you don’t pay it off, your bad credit will get even worse. This will just make it more difficult for you to get credit from anyone. So only use this option if you are able to pay off the entire charged amount before interest accrues.
Also, it’s highly likely that a bad credit credit card account will be subject to a number of account fees that those with better credit don’t have to pay. These fees can include a set up fee, an annual charge, a program fee (these can be around $100) and even a monthly fee. It’s not unusual for these fees to total around $200 or more.
The good thing is that if you handle the account well for a set period of time (like 6 months) then you can call the company and ask them to waive the fees and even raise your credit limit. By this time the prompt payments will show up in your improved credit score. Some of these cards will even report your prompt payments to the three major credit reporting bureaus.
There is a slightly different route you can take if you still are not sure of your own ability to manage credit cards responsibly. A secured credit card offers many of the same credit building benefits as other credit cards, without actually giving you a line of credit from which to draw on. Since a secured card requires that you deposit the amount available, there is unlikely to be a credit check or an income requirement attached to it. If you put down $500, then you can spend up to $500 on the card without fear of getting deeper into debt.
The final aspect to look at is whether or not this is the right time for you to get a credit card. If you want a credit card because there are things you want to buy, but can’t afford then you might want to step back and try to get your cash flow situation in balance before putting yourself into a position which could damage your credit even more. On the other hand, if you want a credit card to re-establish your credit rating, or to use for things like booking hotels and flights, then this might be a good move.
You can use the free credit card “Chaser” tool on this website to track down available cards. Then evaluate their fees and interest rates. If you find a card that will help you reach your financial goals, then go ahead and get that card and watch your bad credit turn good again. Get started finding the best credit cards today!
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