The problems associated with having bad credit are very real.
Every year, thousands of Americans face the dilemma of having a high debt load and bad credit. Whether you are applying for some sort of financing or applying for a job. Having bad credit can effect whether you get either successfully.
When you are rebuilding your credit, you know you need to get new lines of credit to counteract the bad ones on your credit report. Also new lines of credit show prospective lenders that someone took a chance on you and you are now able to pay your debts on time and in full.
But getting approved for new lines of credit is easier said then done. If you’re in the same situation, what can you do about it? Below we talk about the different types of credit cards available to people with bad credit.
Different types of credit cards for people with bad credit
Secured credit cards are popular tools for rebuilding bad credit. These are just like regular credit cards because the cardholder is also given a credit line. However, the credit limit given will often depend on the amount of security deposit submitted by the card holder.
Like a regular card, the cardholder have the option to carry over balances from month to month and submit only the minimum due payment. Even with a poor credit score, anyone can get approved for a secured card as long as he/she can submit a security deposit. Find a secured credit card issuer that reports to the credit bureaus to ensure that you can rebuild your bad credit. For a list of secured credit card issuers, click here
Department store credit cards
Unlike a standard credit card, department store cards are not issued by credit card companies but the stores or merchants. However you can only use this type of card in specific store locations or establishments.
The good thing about department store cards is that depending on the store, they can be easy to get. Now if you have bad credit, don’t walk into a high end department store and expect to get approve for a credit card. Aim for more budget friendly stores. And don’t forget to ask their credit department what their credit requirements are BEFORE you apply for credit.
Merchandise cards are like department store cards in that you can only use them to purchase items from the catalog that issued it. These cards come in handy when you are trying to show that you can be approved for large credit lines. Most of them will issue credit of $3,000 and above. But you need to make sure they report to the credit bureaus. Some will do so for free, some for a fee and some of them don’t report at all. Its up to you to verify this before you apply for one. These cards are easy to get approved for, in fact many of them offer guaranteed approval. For a list of merchandise credit cards, click here.
Bad Credit Credit Cards With Gas Rewards
In recent years, some banks like Bank One have started to issue reward credit cards to people with bad credit. One of the most popular of these rewards is the reward credit card that gives you points towards gas. Bad credit credit card with gas rewards like the ones found one this page.
If your credit score is closer to fair then to bad, you may want to apply for your local gas stations credit card. Just keep in mind that the issuer behind these cards tend to be banks like Citibank. They like higher credit scores, usually somewhere above a 630. But you need to contact them and ASK. Some of them require good credit for approval.
PrePaid Debit Cards
Prepaid debit cards can be used like a regular credit card. The only difference is that the cardholder must deposit funds to his account before charging anything to his debit card. Prepaid debit cards can be used to repair your bad credit if you choose one that reports to the credit bureaus. This used to be a common option that prepaid credit card issuers would offer. Some for free and some for a small monthly fee. You need to verify with the issuer if they report to the credit reporting agencies. You should make sure they report to at least one. If they don’t report, they are of no use to you for the purpose of rebuild your credit rating. For a list of prepaid debit cards, please click here