Credit cards for bad credit will really help you fix credit errors from the past, build your credit from scratch, and can create a financial future for you and your family that is brighter than before.
Although there are many available companies that issue credit cards for bad credit, we recommend that you only look for cards that have a low upfront fee, offer a pre-qualification check, and report to all three credit bureaus.
The main key to using a bad credit credit card for your benefit is making payments on time every month, keeping your credit card balance low, and monitoring your credit for positive changes.
Choose one safe or unsecured credit card for bad credit from our list and use it responsibly to start building better credit from time to time.
Capital One® Secured Mastercard®
For a minimum guarantee deposit and no annual fees, you can create an account and start building credit in a short time. Use your card responsibly for the purpose of controlling your credit today! Besides Capital One® Secured Mastercard®, there are also several others;
- Indigo® Platinum Mastercard®
- Credit OneBank® Unsecured Visa® with Cash Back Rewards
- Milestone® Gold Mastercard®
- Total Visa® Unsecured Credit Card
- Discover it® Secured
Do You Need Credit Cards for Bad Credit?
This is how it works. Credit cards for bad credit will be able to help increase your finances and credit score when not approved for traditional credit cards or loans. However, that does not mean these cards are ideal for everyone. In some cases, it is possible you can qualify to get a credit card with a fair credit or a traditional unsecured credit card without realizing it.
Before you apply for a credit card for bad credit, make sure this is your next best step. Here are some credit card signs for bad credit, the best choice for your wallet:
- Your credit score is below 650. Although there are many credit scores used today, the FICO valuation model is the most popular. This valuation method gives a score between 300 and 850, with the highest score representing the best credit. Thus, a credit score of 650 is usually considered a dividing line between prime and subprime. If your FICO score falls below that range, chances are you will only qualify for a credit card specifically for people with bad credit.
- You have no other way to prove your credit worthiness. When you have bad credit, it can be difficult to find a bank that is willing to give you a chance to improve your situation. This is why many people sign up for bad credit credit cards – even when the requirements are not ideal. When you really only need to set foot on the door, there may be no other choice.
- You have financial goals to achieve. Are you tired of struggling to qualify for car loans, apartments without cosigners, and credit card awards that allow you to earn airline points and miles? Credit cards for bad credit may not offer many benefits themselves, but can lay the foundation for better credit that can benefit you in the future.
How to Register a Credit Card with Bad Credit
When it comes time to apply for credit cards with bad credit, there are some best practices that can help guide you to the best results. Before you apply for a credit card with bad credit, here are a few things to consider:
Know your credit score. Knowing your credit score helps you narrow down which cards you like the most to agree to during the process. See our list of the best free credit report sites for 2019.
- Try to be unsafe first. Many unsecured credit cards for bad credit offer a pre-qualification option that allows you to check the possibilities for approval without hurting your credit. It doesn’t take much work to see if you can get a pre-qualification for a better card, so you can try it.
- Avoid striking cards. The best gifts, cash back, and travel credit cards may be tempting, but you want to focus on credit cards for people with special bad credit first. If you can increase your credit score from time to time, some of the top credit cards will eventually be available to you.
- Go guaranteed for a limited time. If a card without collateral is not an option, consider a secured credit card. You have to put down a deposit, but you can still build credit from time to time. Finally, you can upgrade your secure credit card to an unsecured option and get your initial cash deposit back.
- Try a prepaid debit card. You might need a bank account to open a safe credit card. If you don’t have one, use a prepaid debit card until you can open an account. You won’t build credit, but it’s a good short-term solution.
How to Use Your New Credit Card to Increase Your Credit Score
If you don’t know now, you can definitely use credit cards for people with bad credit to increase your score. However, it is important to understand all the other steps you can take to help your credit, including understanding your credit history and how credit works in general. These six steps will help you get started:
- Get a copy of your credit report.
- Refute any inaccuracies in your report.
- Pay all current debts.
- Get credit cards for anyone with bad credit.
- Set up a payment reminder system.
- Repeat steps 1 to 5 as needed.
1: Get copy of your credit report
Your credit report will give you insight into how you can increase your credit score. Request a copy of your credit report from the three bureaus through AnnualCreditReport.com (you can request a copy of one or all three every 12 months for free). Check everything in the report to find patterns that might hinder your efforts (such as making late payments or no payments).
2: Dispute any inaccuracies
When you look through your credit report, you also want to make sure everything is accurate and up to date. Having inaccuracies in your credit report can reduce your credit score unnecessarily. If you find an error, you must refute it by contacting a credit reporting agent and a company that provides inaccurate information. You can dispute incorrect information about your credit report online, by mail, or by telephone.
3: Pay debt
If you currently have credit card debt, you want to pay it off before opening a new credit line. Your credit utilization rate – the amount you charge in relation to your credit limit – accounts for 30% of your credit score. This means you want to keep your balance low or fully paid every month. However, after you pay off the card, don’t close it. Having a long credit history is also important to increase your credit score.
4: Get credit cards for anyone with bad credit
Now that you have a better understanding of your credit score and credit report history, it is time to start building or rebuilding your credit. Apply for one of the credit cards with bad credit on our list, but make sure to limit the number of applications you fill. Too many difficult questions on your credit report can damage your score. Not sure if you will be approved? Many of the cards on our list will notify you if you pre-qualify without damaging your credit score.
5: Set up a payment reminder system
Now that you have rebuilt or made credit, it is time to achieve the best. Making payments on time accounts for 35% of your credit score, so it’s important not to miss payments or pay late. Register to get reminders, set calendar notifications, use financial tracking software, or download applications that notify you. You can choose to make one payment a month or break it into small pieces, like twice a month or once a week. Make sure you have at least a minimum balance (or, ideally, full balance) on time for each payment cycle.
6: Wash, rinse and repeat
After you have the basics, it’s time to keep repeating it. The only way to build credit is to use credit regularly and responsibly. Charge small amounts every month, pay it off in full, and repeat. Check your credit score every few months to see if it increases. Ask for a copy of your credit report once a year to check it out.
Good credit doesn’t just happen, but credit cards for people with bad credit are a good first step. If you are responsible, persistent, and patient with your credit, you can rebuild or get good credit on time. https://bit.ly/2WXNUxJ
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