Can I get a credit card with bad credit?

May 16, 2021
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A bad credit score can make getting a credit card difficult. But it’s not impossible. The challenge is that bad credit may hinder your chances of approval for new credit cards. And to improve your credit score you need new credit accounts. It’s a catch-22. Not to worry, we have some insights to help you overcome bad credit challenges.

Before you apply for a new credit card, check your credit report to know your score. You can obtain a free copy of your credit report once per year by visiting AnnualCreditReport.com. Knowing your score will give you a baseline for where to begin and an idea of the best credit cards for you. Many cards give a range of acceptable scores, so you can narrow your search according to your score.

Whether you’re trying to build or repair credit, the right card can help you accomplish that goal. If you’re looking for relief from a hardship and have no other solution, a credit card may be a viable option. As you begin looking at different offers, pay attention to fees and interest rates.

Some credit cards have annual fees for the rewards or points they offer. If you’re looking to build or repair credit, avoid cards with an annual fee. They can add up when you have multiple cards and impede your process of building credit.

When evaluating different credit cards, it’s a good idea to look past the introductory rate. Many cards have low introductory rates for the first six months and then go up as much as 20 percent or more, leaving you with more debt than you planned for.

When applying for a credit card, doing your homework is vital. Reading the fine print tells you when the introductory rate expires, interest rates, balance transfer fees, additional fees, and security clauses. Understand the terms before signing anything and be sure you can afford the payments. The goal is to get out of debt, not accumulate more.

Before applying for a new credit card, make sure you clear up any negative issues on your credit report. Not only will it help improve your credit score, but it also increases the likelihood of approval. If there are a lot of unpaid cards and accounts in collection, you will have trouble getting another credit card.

Derogatory issues on your credit report breakdown into two main areas: collections and public records.

If you fail to make payments on your accounts, creditors can send them to debt collectors to try and recover the amount owed. This creates a derogatory mark on your credit report and can affect your score. Be sure to check your report for collections. If you find a collection that you think is in error, call the debt collector to get more information or ask to have it removed. There may be errors, so the more closely you monitor your report, the better.

Public records are from government documents and appear on your credit report as bankruptcy, lawsuits, foreclosure, and tax liens. These can affect your credit for 7-10 years. In most cases, these don’t come as a surprise. But if you check your report and find an issue that you didn’t know about, call and ask about it as soon as possible.

If you’re looking to rebuild your credit, there are several options available to you. Secured, unsecured, and prepaid cards are the main cards to consider:

Secured credit cards require a deposit to borrow against. The deposit amount acts as collateral and shows the credit card company that you’re serious about making payments on time. Just like a regular credit card, late payments and missed payments will hurt your credit score.

Unsecured credit cards have no deposit amount and are what everyone thinks of when they think of a credit card. Some offer lower interest rates than others and some have extra or annual fees. If you have bad credit, you may be able to get a card but at a higher introductory interest rate. You’ll have to prove yourself by making prompt payments and managing your spending before you qualify for a lower interest rate and lower fees.

Building or repairing credit will help you down the road as you are looking to finance a new car or your next home purchase.

Here’s a list of cards from creditcards.com to help get you started:

This secured credit card is a good option to help you get your credit back on track. After you make the required security deposit, there’s no annual fee. Capital One reports to the major credit bureaus, which helps you build your credit score. And after making payments on time for 6 months, you’re eligible for a higher credit limit.

This unsecured Credit One card has 1% cash back rewards on eligible purchases as well as account alerts and fraud protection. This card also gives you free online access to your Experian credit score and report so you can monitor your credit health. And, as you establish a history of making payments on time, you may be eligible for a credit line increase.

You can pre-qualify without affecting your credit score. If you have a bankruptcy in your past, that’s ok too. There may be an annual fee and higher introductory interest rate, depending on your credit score. As you make consistent payments, they will report to the credit bureaus to help build your credit.

Getting a credit card can be a great way to rebuild your credit. Just remember to pay attention to the details. Know your credit score before applying, shop around for the best rate, and do your homework before signing any agreements. When getting back on track financially, it’s especially important to think things through and make wise, informed decisions.

*Snap is not endorsed by or affiliated with creditcards.com. For educational purposes only.

The content of this article is for informational purposes only and should not be construed as personalized legal, financial, or other advice. This article represents paid promotional material provided by or on behalf of Snap Finance, LLC, or its affiliates.
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