Trying to get a credit card when you have no background credit can seem like a daunting task, but that’s nothing when compared to figuring out how to get a credit card with bad credit. Once your credit score goes too far in the red, it almost seems like an impossible task to get anyone to take your side in helping you obtain a credit card, but don’t give up hope. Here are a few desperation tips for when you really want a credit card while being a victim of bad credit circumstance.
One option you have is to open a checking account with a banking branch. In doing so, it won’t necessarily build your credit back up, but it will help you build a relationship with the bank itself being an account holder. Not only that, but by actively using your account to pay your bills in a timely fashion, this will put you on the road to credit recovery, which in due time will allow you to be able to apply for a credit card under normal circumstances.
After building your credit and/or relationship with the bank, you can soon attempt to apply for a secured credit card, which are fairly simple to obtain, even for those with horrible credit. The reason for this is that in order to apply for these cards, a security deposit has to first be placed which will ultimately become your credit limit. So if you place a security deposit of $500 for example, then your credit limit for that particular card will also be $500. This security deposit will be held onto by the bank itself, and they would only use it if you happened to mess up the credit there and had your account sent off to collections.
So in a sense, by messing up your credit on a secured credit card, you would be paying for the mistake out of your pocket instead of the bank, and this is why they are so lax when it comes to application, as it’s little risk to the bank itself. Other than that, the secured credit card works exactly the same as any other credit card. You can use it to make purchases according to your limit, and you would in turn have to pay the bill either in full or the minimum amount.
When using this option, the card is usually linked to a savings account, which will allow it to build interest for you over time, and this actually will help you build credit. It’s also wise to note that whatever your limit is, that you should follow best practices for a regular credit card and only make purchases that equal 25% of your deposit or less. In doing so, this will help you raise your credit score in a positive light.
Finally, over time you should try to add to the security deposit as much as possible and continue to pay off your bills as they come. After about a year of doing this, you may find that you will be able to convert or upgrade your secured credit card to a regular card, and also regain access to your security deposit. By this time you will also have a pretty decent credit score. This will open you up to possibilities of what a typical credit score owner will have access to, such as taking out loans.
The other possible option that you may have while under the impression of bad credit would be attempting to apply for credit cards that accept people with bad credit, which also happen to be some of the worst cards to receive due to the high interest rates of these cards. In the end, these may be more troublesome than what they’re worth, as they can grow to be very costly, even when making small purchases.
At the end of the day, having bad credit severely limits your options since credit card brokers consider you a risk at the sight of your credit history, even if it wasn’t necessarily your fault to begin with.
Here are a few other pointers that will help you rebuild your credit so that you may be provided with more options for credit benefits in the future:
- Only apply for credit when absolutely necessary and you are fairly sure that you will be approved.
- If you have any accounts that you aren’t using, don’t close them, as they will still show up on your credit report regardless for up to 7 years.
- Try to get your debt under control, and pay your bills on time.
After working hard to regain control of your debt and rebuilding your credit history, you won’t be asking how to get a credit card with bad credit, but instead which available credit card you want to apply to the most.