Having a discharged bankruptcy on your credit report or any other derogatory marks can limit your choices when it comes to rebuilding credit.
Fortunately, you will find credit cards on the market which are especially created for customers with low credit score history. Let’s review some tips on ways you can get the best bad credit credit card even with having a low credit score and how you can use them for a tool to rebuild your credit.
Get a secured credit card.
A secured card simply requires the applicant to submit a security deposit that will equal your credit limit, Most secured credit cards have a minimum security deposit of $200. Whats great about a secured credit card is the fact that if you want to have a larger line of credit, you just need to submit a larger security deposit. Many banks that issue secured credit cards will allow you to make periodic additional payments to increase your credit limit.
Choosing A Secured Credit Card
When choosing a secured credit card you want to make sure you do your research. Not all secured credit cards are the same. Many of these cards do not pull your credit, so they are often called guaranteed approval credit cards. But some do. If your score is really low or if you have not built any credit yet. You want to make sure you get one of these cards. But for the most part, a low credit score will not stop you from getting approved.
A big benefit to a secured credit card is generally with 2 years of timely payments your card can become unsecured and you will get your security deposit back.
Unsecured bad credit credit cards
There are many unsecured bad credit cards. These cards are easy to get, but come with a hefty fee that is placed on the card before you can use it. So if you get a card with a $300 credit limit, we have seen some cards that have fees of $250 of the $300 limit. You have to pay that first before you can fully utilize the card.
This type of card appeals to people who don’t have the time to save for a secured card. Again, do your research. Not all unsecured bad credit credit cards are the same. They will come with different qualifications, credit limits, rates and fees. But just like secured credit cards, they can be used to help you rebuild your credit,
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.