Can You Get a Credit Card with Bad Credit?

The stigma of bad credit can follow you around like a dark cloud – but you can still qualify for the credit cards that you need, regardless of your negligent payment history and bad record. Cards for those with less-than-perfect credit are just like traditional chargecards in many ways, but are specially designed for those who are rebuilding their scores.

Unsecured Bad Credit Cards
An unsecured card for bad credit is the most obvious choice for most folks who are looking to rebuild financially. Unsecured means it is issued based on creditworthiness. For this reason, there are very few companies that are willing to issue these types of accounts for those consumers who have truly bad credit. Those that do will usually charge a fee, typically called a “program” fee that is actually just a way to charge for absorbing the risk of doing business with you. These fees can be upwards of a hundred dollars – but these offers shouldn’t be overlooked as they can be wonderful opportunities to obtain a card that can help rebuild your credit.

Secured Bad Credit Cards
On the flip side is secured credit cards. Secured can also be interpreted as prepaid because you must pay a deposit that is equal to the amount of credit that you want extended to you. For example, if you want to have a $500 credit line, you will deposit $500. Your card will work like usual and you will make regular monthly payments just like you would with an unsecured account.

Managing Your Finances to Combat Bad Credit
Once you have opened your secured or unsecured accounts, the work of rebuilding your credit begins. You should plan on:

  • Making your monthly payments on time, each and every month. Even one late payment can cause your credit score to decline even more. Always mail your payment at least ten days before the due date to allow time for it to travel through the mail and to be processed.
  • Not exceeding the credit limit that has been established. Going over-the-limit is not only a quick way to make your credit score even worse, it is also very expensive. Most companies charge exorbitant fees if you exceed the amount of credit that is available. In addition, charging more than fifty percent of your available funds during one month can have a negative impact on your credit to debt ratio that is used to determine your score.
  • Running a balance. Don’t pay your card off in full each month. Running a balance of one-third of your available limit shows that you are capable of managing your credit and your finances.