A credit card can be obtained even if your credit score is poor. Some credit card companies specialize in providing credit cards for people with bad credit. Before applying for a card, it is important to understand which cards are accepted by people with poor credit. Not only should you know about the acceptance rates but also what card benefits are available. For example, if you have bad credit, you can apply for a card that offers cash back rewards.
Unsecured credit cards
It is not easy to get unsecured credit cards with bad credit. However, it is possible to still find one that suits your needs. These cards can be used for small purchases and allow you to pay the entire balance each month. This helps establish a stable payment history. Experian Boost can be offered by some credit card issuers as a free program. It will show you your regular credit reports payments.
Consider the fees when looking for an unsecured credit line for people with bad credit. Many unsecured cards have high credit limits and APRs. These cards also come with minimal rewards and fees. However, if you're willing to accept the restrictions that come with the card, you'll find these cards a great option. You can also earn cash back from select merchants.
Balance transfer credit cards
People with bad credit may be eligible to apply for credit cards. This can be a great way improve your credit score. In order to transfer a balance, you will need to have good credit. A credit score of 670 or higher is considered excellent. To improve your credit score, a secured loan card with balance transfer and regular payments can be chosen. Once your credit score improves, you can qualify for a higher-limit credit card.
Bad credit balance transfer credit credit cards are not easy to get. A few things can be done to improve your credit score and increase your chances for approval if you do need one. First, consider checking your debt-to-income ratio (DTI). This is an important metric that can affect your approval. A good DTI is less than 36%. Even though every lender has their own requirements and guidelines, a good DTI is able to help you obtain a balance transfer.
Cash back Rewards Credit Cards
If you're looking for a cash back rewards credit card, you can choose from a variety of options. The majority of cash back rewards credit card cards do not require an annual fee. Some do, however. These cards tend to have higher cash back rates and can more than make up for the annual fee. In addition, they often come with sign-up bonuses, which are easy to collect.
For those with bad credit, a secured credit credit card may be an option. This card requires a security deposit. The amount can vary from $200 to $5,000. The issuer will return the security deposit when the account is closed. They don't have to risk losing it. While these cards may be easy to get, approval isn't guaranteed, so be sure to check your credit history before committing to one. Bankruptcies and serious credit problems can lead to the denial of a secured card application.
Annual fee for Bad Credit Credit Cards
An annual fee can seem unnecessary if you have poor credit. Bad credit cards often have an annual fee. This fee can quickly add up. To offset higher card costs, some issuers have introduced new fees. You might consider a secured credit card if you want a card with an annual free fee. These cards are generally easier to get approved for. However, they can be costly each year.
Another reason to avoid paying an annual fee is because unsecured credit cards don't offer rewards. These cards may be charged higher interest rates or have penalty APRs. The goal is to get a rate that is as low as possible. You will need to only use the card for purchases you are able to pay off on time.