Some people are hesitant to apply for credit cards because they are afraid to be rejected or denied. There are still mainstream lenders that avoid dealing with people with bad credit because of the high risks these groups pose.
Bad Credit Credit Cards
If you will just search the web, you will find a lot of credit card companies offering credit cards for bad credit or no credit at all. These cards are just like any other credit card, but they cater to people with poor credit.
People with bad credit are often perceived as “high risk borrowers” They are responsible people who have either made wrong decisions in the past or encountered unforeseen circumstances which resulted in a poor credit score.
Credit Cards – Great Way to Rebuild Your Credit
One of the most effective ways of improving your credit rating is by owning a credit card. Be sure to exercise financial responsibility. You can prove that you are a responsible credit card holder simply by making purchases that will not exceed your credit limit and make payments on time.
Types of Credit Card For Bad Credit
There are two types of credit cards for people who have bad credit:
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Secured Credit Cards
Secured credit cards are the option of choice for most credit repair professionals. Why? There are a lot of benefits to a secured credit card that is not offered on all unsecured bad credit card offers.
- Most secured credit cards are guaranteed approval
- They have low rates and fees.
- Security deposit equals credit limit. Many will let you add to your security deposit over time. Thus making it look like a credit limit increase!
- After a year or 2 of on-time payments, your security deposit will be returned to you. Click here for secured credit cards you can apply for online
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Unsecured Credit Cards
This is a good option for people that don’t have the money for a security deposit. But be aware that most of these unsecured cards have a fee. The fee they charge is automatically put on your credit card. So if they give you a credit limit of $300. Let’s say the fee is $50. Your available credit is $250 until you pay the fee off.
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Instant Approval Credit Cards
These are cards that offer guaranteed approval, but you can only use them to buy merchandise from the catalog or website that issues it. When using these cards, you want to make sure the company will report to at least 1 credit reporting agency. These are GREAT cards for people with a recent bankruptcy. The credit limits tend to be large and they look like regular credit cards on your credit report!
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How to Apply for a Bad Credit Credit Card
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Search the internet for credit card companies offering credit cards for bad credit.
Here on BadCreditResources.com we have created pages dedicated to listing the different types of credit cards for bad credit. We are also working on bringing you reviews of each one! Please check back often to read them!
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Know what your credit looks like BEFORE you apply
Get a copy of your credit report from all 3 credit reporting agencies. You need to have some idea of what your credit looks like BEFORE you apply. If you have been recently late or have a lot of accounts in collections, You will want to look at the guaranteed approval credit cards. Remember, most credit card companies will pull your credit using a hard inquiry. A hard inquiry is one that will affect your credit score. If possible, look for soft inquiry credit cards.
Soft inquiry credit cards will not affect your credit when you apply for them -
Fix any inaccurate information that you find
Start off verifying your name, address, past employment. If there are unfamiliar information showing up, these may not affect your credit score, but they can be an indicator of identity theft. Fix them and move on to look for collection or charged off accounts that have been paid but now showing as paid. If you don’t need the credit card right away, you may want to look into improving your credit score as much as possible by sending pay for deletion letters to your creditors. When they accept this deal from you they remove themselves COMPLETELY from your credit report which will improve your score.
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Make sure you understand the rates & fees being charge
Once you have found the credit card(s) you want. Make sure you understand rate and terms. Keep in mind you don’t want to apply for a lot of credit at the same time. We limit our clients to 2 credit cards at the same time.
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Set up automatic bill pay
Now that you are working on improving your credit. You want to make sure you pay everything on time. On time payment is a HUGE factor in your credit score!
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