Best Credit Cards for Those with Bad Credit

cards for people with bad credit

 

How to Choose the Best Credit Cards if you have Bad Credit

Have you applied for a credit card and found yourself rejected? If so, you’ll want to figure out why you've been turned down. Then, either find cards that fit your current credit profile or try to rebuild your credit rating. Visit ConsumerFU's Guide to Credit Scoring for more detailed information on credit scores. Rebuilding credit is not as hard as you may think; use the top 'bad credit' credit card and maintain a manageable balance. Make payments on time each month to show you are able to manage debt and are willing and able to pay back what you borrow. Discover how to avoid continuous rejection and how to improve your credit history.

Why am I being rejected for a New Credit Card?

Due to the economy in the US, banks and credit unions have begun to change how they do business. In the past, lending money was something these financial institutions would do easily, even eagerly (at times). Now banks and credit unions want to keep their cash safer; they want to take fewer risks. What this means is if you used to be easily approved for loans, it may be an uphill battle now. 'The exact same is true for credit bureaus and credit card companies. To determine your credit rating, lenders such as banks, credit unions, and credit bureaus will look at everything in your credit history. Whether or not you’ve paid past loans on time, defaulted on a loan, etc. Keep in mind your creditworthiness will be assessed based on your ability and willingness to repay loans. If you are repeatedly rejected for a credit card everywhere you apply, then it is very likely you have poor credit history. By using your Social Security Number, credit card companies know everything! Discover what your credit score is at TransUnion. It’s free!

What do I do when I'm Rejected for a Credit Card?

The most important thing you can do if you are rejected: stop applying! Every time a question about your credit is made, your credit history will show it. If there are too many inquiries made, it will affect your credit score negatively. If you haven't applied for a credit card in a while, or have applied once and been rejected, you could check your credit rating for free at TransUnion. Next, do your research. Discover what kind of credit rating each bureau is looking for.

How do I Get accepted for a Credit Card?

There are – quite literally – tons of credit cards available, for all sorts of uses. So the first thing you need to do is decide what type of credit card you want. What will you be using it for? Will you need it for borrowing money – in order to reduce existing debt? Before you apply for yet another credit card, try consolidating your debt first. You can reduce your interest, your monthly payments, and how long it will take you to get out of debt. If, after you have consolidated your debt, you still want/need a new credit card, keep reading. You’ll need to try to find a credit card company that will accept you. Try browsing NerdWallet or CreditCards.com. Both of these sites allow you to search and compare credit cards that are specifically for people with bad credit.

What is The Best Credit Card to Rebuild my Credit Rating?

By getting the right type of credit card, you can easily rebuild your credit score. All you will need to do is keep in good standing by never missing a payment and always staying within your spending limit. Keep in mind that you do not want to pay any more interest than is absolutely necessary since the rate is higher for many of these cards. So, you should keep your balance manageable and make more than the minimum payment each month to keep interest charges low while proving you are capable of making payments on a consistent basis. If you are clever about how you use your new credit card, you’ll be able to pull yourself out of debt within a year or so. Use it very sparingly, and always pay it off in full. This will boost your credit rating like little else will.

The Top Credit Cards to Rebuild Your Credit Score

Card Annual Fee Interest Rates Rewards

Capital One Secured Master Card (a secured credit card)

cap one secured

$29 22.9% None
Review: With no hidden charges and an annual fee of just $29, this is a great card to boost your credit rating. Keep the APR in mind, however: 22.9% - 24.9%% is quite high! With the Capital One Secured Master Card, as long as you stay within the no-interest time periods, this is a fantastic choice. This credit card has a low and refundable security deposit. The Capital One Secured Master Card is one of the best secured credit cards available. Your amount of credit is based on your credit score. In other words, your limit may be $200 or the maximum $3000. In addition, Capital One will allow you to pay the security deposit over time! This is great for people who are not able to pay it all-at-once. Just be sure to pay the security deposit (in full) within 80 days of your approval.

First Progress Platinum Select Master Card (a secured credit card)

first progress

$39 19.99% None
Review: This card has a higher annual fee but a lower APR, so is a good card for those with bad credit scores. The First Progress Platinum Select Master Card requires minimal or no credit history at all in order to be approved. The deposit is high ($300 - $2000), and must be submitted along with your application, but is completely refundable. To get your deposit back – at any time you want – all you need to do is pay your balance in full. This feature, along with the fact that the First Progress Platinum Select Master Card can be used anywhere any other credit card can be used, makes this card an ideal choice for someone with a bad credit line.

First Progress Platinum Prestige Master Card (a secured credit card)

first progress

$44 11.99% None
Review: A lot like the First Progress Platinum Select Master Card, this card can be used anywhere other credit cards can be used. Little to no credit history is required, and your security deposit is refundable, as well. With the First Progress Platinum Prestige Master Card, your credit line could be anywhere between $300 and $2000. The annual fee of this credit card is a bit higher than others, but the APR is lower than the other cards mentioned here. The low APR on the First Progress Platinum Prestige Master Card makes this credit card a safer card for individuals with bad credit, when compared to others.

If you are rejected for the above Credit Cards

Just get yourself a prepaid credit or debit card! These cards do not require a credit check. Because of this, anyone can get one. Keep in mind, however, that this credit card is not like others. It is similar to writing a check, in fact, because you will be withdrawing your own money from an account you have specifically set up for this card. Some of the highlights of a prepaid debit or credit card are:

  • You never incur debt because you’re using your own money that you have deposited into your special account.
  • If you put a specific amount onto the prepaid card, most credit card bureaus will waive some of the usual fees, such as the service fee.

On the negative side of the prepaid credit card, it seems most credit bureaus charge you a fee for everything. Besides the usual activation and monthly fees, many bureaus also have a charge applied when you make a purchase. Commonly, there are also fees for:

  • Making ATM Withdrawals
  • Printed Statements
  • Replacing Lost or Stolen Cards
  • Inactivity
  • Use of your Card Internationally

When you are choosing which prepaid card you want, keep in mind what you will be using it for. What activities and purchases will you be paying for with this prepaid credit card? Once you know the answer to this question, the key is to choose the card that has the least fees according to your spending habits. Be sure to look at the fees and charges closely; the can – and do – vary widely when looking at the various prepaid cards available.

What Else Can I do to improve My Chances of Getting a Credit Card?

There are quite a few little things you can do to improve how credit bureaus see you and your account. Never be late with payments Try to pay more than your minimum monthly payment amount

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