Bad Credit? No Problem!

When you have bad credit, you will need to find a secured card offered by a reputable bank that offers a card with a reasonable annual fee or even no annual fee. Luckily, you can find many cards with an annual fee that is under $50.

You may also benefit from a card that offers text and email alerts that will remind you when your payment is due. If you travel often, then a credit card that offers a rental car collision damage waiver policy will also come in handy.

These policies are standard on most unsecured credit cards, but they are much less common when it comes to secured cards. Cardholders that have bad credit will receive some benefits from having a credit card account at the same bank where they also have a checking or savings account. This gives you the opportunity to see all of your accounts in one place, and making payments from one account to another is also easier.

What to Avoid When Applying

Getting an approval is the most difficult thing about applying for a credit card when you also have bad credit. Before applying, make sure you check your credit score to see if your credit is really as bad as you think it is.

People with the lowest credit scores will often need to apply for a secured card if they do not want to be denied by a standard credit card. A secured card is a credit card that requires the cardholder to make a cash deposit in order to “secure” the line of credit.

Even with bad credit, you should still make sure you do not apply for a card that offers extremely poor rates and terms. As an example, you should avoid any card that has a very high interest rate, does not offer an interest-free grace period, or has expensive monthly fees.

Reputable banks offer several secured credit card options, so you do not need to take on an extremely uncompetitive card.

Should You Apply for More Than One?

Those with bad credit should avoid the temptation to apply for multiple credit cards. Rather, focus on rebuilding your credit scores and you credit history by staying below your credit limits, making on-time payments every time, and staying out of any further debt. When you are trying to manage multiple accounts, it can be harder for you to reach your end goal.

After you have used a secured card for a while, have payed your bills on time, have kept your balances below your limits, and have stayed out of debt for at least a year, it might be a good time for you to apply for an unsecured card. It is still important to use your credit card responsibly and in a limited way as your credit scores continue to recover. Once your credit score has reached average or good, you can then think about having different cards for different purposes.

When Is the Best Time to Apply?

If you are looking to open a new credit card account so that you can build your credit history and also raise your credit score, you should make sure that you will have the best chance possible of approval.

Any bankruptcies should be fully discharged, even for a secured credit card. Also, use a secured card and pay all of your bills on time for at least a year before you consider applying for an unsecured card.

Making your payments on time each and every month and keeping your balances low compared to your credit limit will leave positive marks on your credit report.