If you have bad credit, then you know just how hard it can be to get approved for a credit card. With each disapproval, you are decreasing your credit score and making your credit worse! This is why you should look for sub prime credit cards that cater to people with less than perfect credit.
Subprime cards are issued by banks to customers that most credit companies turn down. These cards tend to have higher interest rates and lower credit limits than “normal” credit cards. But they are a great way to start to building or rebuilding credit.
You can get a secured or unsecured card from them. Both can be used to improve your credit. Keep the following tips in mind when you are choosing your next card. With good credit management you will be able to start applying for good credit cards within a year or two depending on how bad your credit currently is.
Bad Credit Unsecured Credit Cards
There are credit cards for people with bad credit and no security deposit. You just have to know where to look. But the first step is knowing your credit score. Your credit score is important if you plan on buying a car, a house or apply for a job. Before applying for any kind of financing, contact all 3 credit bureaus. Look for errors. If you find any, try to dispute them before applying. Once you have done all you can to improve your credit score you can start researching bad credit credit cards.
Secured Credit Cards
A secured credit card is a credit card that is tied to a savings account that is used as your credit balance. Since you use a savings account as security, some secured cards can have high credit limits. That is one of the reasons so many consumers find secured credit cards essential to building their credit.
How To Find A Bad Credit Card
Look for cards that are specifically for people with bad credit and/ or no credit. Also look at charge cards like what you get from department stores. When you do get approved for one of these cards, use it wisely. This is only the first step. Make regular purchases on this card and pay it off at the end of every month. This will help you establish credit and get you ready for a much higher credit limit or a card with lower interest rates.
Avoid Credit Card Traps
Avoid cards that do not report to a credit bureau. Don’t go for a credit builder program as they DO NOT improve your credit rating in any way. A prepaid card is just like having your checking account, only in the form of a credit card. They are good for making purchases online, over the phone or just to avoid having to carry so much cash around with you.
Prepaid cards should be avoided if it doesn’t have credit builder program. Look for a card that will report to at least 1 of the credit bureaus. A credit card that doesn’t report your activity to a credit bureau is no good in helping you build or rebuild your credit.
Don’t apply for a credit card that caters to good credit. A lot of reward credit cards have minimum credit score requirements of above 680. Each time you have a financing company pull your credit, it will lower your score. There is no point in applying for a credit card that requires a high credit score! All you are doing is lowering your credit score.
Keywords to look for before applying
Look for credit cards that say things like:
- Bad credit ok
- Subprime credit card
- Less than perfect credit ok
- Credit builder program
- Reports to credit bureaus
Stick to the cards designed for people with bad credit and you will be approved more quickly and be able to start rebuilding your credit sooner.
Follow these Steps to get a Credit Card
With some determination and careful planning, you can finally have your own credit card. Just follow the steps we have laid out for you:
- Know your credit score
- Apply for credit cards you can get
- Pay off cards every month
- Don’t miss a payment! Late payments will lower your score
- Wait 6 months to 1 year before trying to apply for a better credit card with a lower interest rate.