How to Obtain A Credit Card Despite Bad Credit
Having a record of bankruptcy in your credit report or other derogatory remarks can limit your options when it comes to rebuilding credit. Fortunately, you can find credit cards in the market which are especially designed for customers with bad credit history.
In this article, let’s discuss some tips on how you can get the best credit card despite having an unimpressive credit score and how you can use it as a tool to regain a good credit standing.
Get a secured credit card.
A secured card simply requires the applicant to submit a security deposit as a guarantee for future debts. The amount can range anywhere from $200 to $500 or more, depending on the credit limit. If you need a higher credit line, you must be prepared to submit an equal or higher deposit. Since approval is not based on credit history, anyone can easily obtain a secured credit card.
The bigger challenge is using the card to improve bad credit. It’s important to remember that secured credit cards typically carry higher interest rates than regular cards. The penalty fees can prove to be stiff as well, if you fail to submit your payment by the due date. Thus, the key to successfully managing a secured credit card is to utilize your credit line wisely and pay your debts on time.
Watch out for “deceiving” credit card offers.
It might be tempting to sign up for a credit card that you receive by mail especially if the offer sounds great. Remember, customers must take the extra time to explore their options and compare different credit cards for bad credit before deciding which one to apply for.
Some companies may advertise an attractive deal which turns out to be awful once you read the fine print. For instance, the low rate may only last for a few months; then it may dramatically increase when the introductory period ends.
Aside from the APR, you want to make sure that the rest of the fees and the conditions of use are reasonable. For instance, will you be able to upgrade to an unsecured account once you’ve proven your credit worthiness? The best secured credit card issuers will automatically upgrade your account after 12 months of consistent and on time payments. Other secured cards may not offer this provision.
Will your payments be regularly reported to the three major credit bureaus? This is a very important factor that you should check on before signing up for a secured card since the only way you can rebuild your bad credit is to have your payments reported to the bureaus.
Apply for a credit card from your personal bank.
It’s a good idea to check out credit card programs offered by your personal bank especially if you have a bad credit history. Since you are an existing customer, your bank is more likely to have confidence in you. If you have an active savings account or checking account with your bank, you might be able to request for a reduced interest rate despite your poor credit score.
About the Author
Shelly Evans is a freelance writer and loan consultant. The website http://www.badcreditresources.com offers resources that specialize in providing bad credit loans and bad credit credit cards to people with bad credit.
Resources for YOU:
Reprint rights available as long as links are left intact and active.
Comments feed
