Obtaining credit card approval can be difficult, especially if you have a poor credit score. It is because banks and other lending institutions want to ensure that they are lending money to someone who is likely to repay the loan. If your credit score is less than 630 FICO, you may find it hard to get approved for a new credit card, or you may be offered a card with very high-interest rates.

Most people will go straight to their local bank and apply. Alternatively, they may see a banner on a website advertising a great card with rewards or cash back and apply. But they don’t read the fine print. 

These credit cards tend to require a credit score well above 670. Applying for these cards is a waste of time and will harm your credit score since they will pull your credit and leave a hard inquiry. But there are cards made specifically for people with poor credit.

What Types of Credit Cards Are Available to People With Poor Credit?

Unsecured Poor Credit Credit Cards

These cards are popular but IMHO overrated. People get drawn in because of the ease of applying and the fact that they don’t have a security deposit required. While these cards are great for rebuilding credit, they have a few drawbacks too.

The Good:

• Easy to apply for
• Higher Approval Rates – a poor credit score doesn’t mean you won’t get approved
• No Security Deposit Required
• Better rewards program

The Bad:

• Credit limits tend to be low, making it simple to max them out. A maxed-out credit card means a lower credit score than you deserve!
• They usually charge a large number of fees.
• Interest rates tend to be higher.

Regardless, unsecured bad credit cards can help some people rebuild their credit.

If used wisely, they can improve your credit dramatically. Click here to see the list of poor credit credit cards.

Secured credit cards – The card of choice for rebuilding your credit

A secured credit card is a type of credit card for people with bad credit.

This account is not approved based on the applicant’s credit history, so whether you have bad credit or no credit should not matter.

If you want a secured credit card, be prepared to submit a security deposit in cash. Depending on the card and issuer, the amount can range from $200 to $5000. If you want to enjoy a higher credit line, y then you need to be prepared to submit an equally high deposit. 

That is because your credit card company will use the security deposit to pay your charges if your account becomes delinquent or you fall behind on your payments.

Apply for a prepaid debit card.

Another type of bad credit card is a prepaid debit card, which can also help to rebuild a damaged credit history or a low credit score. It is because you can find issuers of debit cards today that report payments to the three major credit bureaus. Like a secured credit card, you are required to submit an advanced payment upon opening your account.

However, unlike a secured credit card, a prepaid debit card holder does not receive a credit line. That means a debit cardholder does not have the option to submit payment at a later time or to carry over a balance from one month to the next.

All costs charged to the debit card will be automatically paid using the cash deposit in the cardholder’s account. When the cash balance runs out, the debit cardholder must make a new deposit to be able to use the card for other transactions.

Apply for a department store or gasoline station credit card.

This type of account is exclusively only for the department store or gasoline station that issued the credit card. That means you can charge your department purchases to the card or refuel your car without paying in cash.

Usually, these types of credit cards are payable within a month. Additionally, there is a requirement that the cardholder pays all charges in full without leaving a balance.

Although not your typical bad credit card, a department store or gas station card can help you raise a low credit score, rebuild poor credit, or establish a credit history.

The important thing is that your payments are promptly reported to the three major consumer credit reporting agencies (Experian, Equifax, and TransUnion).

Having a credit card with bad credit can be difficult and costly. It is essential to conduct research before applying for a credit card to ensure you’re getting the best deal for your needs. If you have bad credit, you should start working on rebuilding it as soon as possible. A great way to start is by checking your credit score and learning about the factors that affect it.