7 Ways To Get A Credit Card With Bad Credit

September 18, 2014, Written By Bill Hardekopf
Eraser And Word Bad Credit

Consumers know how hard it is obtain a credit card if your credit score isn’t up to par. Despite all types of difficult circumstances, such as being laid off due to the poor economy, a bad credit score can prevent you from getting credit and make it hard to purchase your day to day necessities. Too often, people with poor credit don’t know their options.

There are a number of ways to get a credit card if you have a poor credit score. It’s important to realize there will likely be road blocks and limitations in your search. You won’t have the same options available as someone with pristine credit. But you will be able to get a line of credit if you look in the right place.

Give An Explanation For Poor Credit

This might sound a bit like begging, but it’s not. You can add a 100-word statement to your credit report explaining the circumstances behind your poor credit, such as the loss of a job. If you can tell your story and convince creditors you are on the road to increasing your credit score, they may believe you are more likely to pay back your debts. Divorce and illness are two other instances where individuals may see a drop in their credit score. Make sure whatever you list is true.

Secured Credit Cards

With a secured credit card, you deposit some money into an account, and then a creditor will provide you with a line of credit equal to your deposit. It is essentially a down payment, and if you don’t pay your credit card bill, your creditor is entitled to the money in the account. This might not sound like a favorable position, but remember that secured credit cards can be used as a valuable tool to rebuild your credit. Make sure the card you apply for reports to a credit reporting agency. This will help you start building a credit history.

Subprime Credit Cards

The word “subprime” has gotten a lot of bad press since the recession. Subprime credit cards are another option for those with poor credit, but they are ripe with fees that many people who are already short on cash may not be able to handle. Interest rates can be dangerously high for those with poor credit, so beware of these cards. They are often a last resort for individuals who need access to credit. However, like secured credit cards, they can be used to rebuild credit. Make sure you read the fine print and understand the applicable fees before you apply for a subprime credit card. Again, make sure the card reports to a credit reporting agency so you start building a credit history.

Retail Store Cards

Retail stores such as Sears or Macy’s often have store credit cards they offer customers. Retail stores are generally more willing to approve applicants without a stellar credit score. But beware: these cards usually come with extremely high interest rates and relatively low credit limits, so make sure you fully understand the terms of the card before applying.

Improve Your Credit

This is probably one of the most difficult options—poor credit can seem extremely hard to repair. But there are choices, it is just a process that will take a significant period of time. If you have poor credit, you can open bank accounts and pay off your loans and credit cards on time. If you pay off your debt in a timely manner, your credit score will improve over time and you will gain access to more credit card options.

Cosigned Credit Cards

Cosigned credit cards operate just as they sound—if you get a cosigner, you will be able to obtain a card that would not be available to you otherwise. The cosigner has to have good credit, and they are responsible for your debt if you can’t pay. Make sure your cosigner fully recognizes their obligations and what will happen if you are unable to pay.

Select A Credit Card Designed For Those With Poor Credit

There are a number of credit cards offered by Visa and MasterCard designed for people with poor credit. These cards have low limits, a significant number of fees and high interest rates. But for some people, it may be their best option. Talk to your bank’s administrators or with your current credit card company to see if they offer a credit card that fits your personal needs.

Finding a line of credit doesn’t have to be a difficult endeavor. If you know what you are looking for, you can find a line of credit that fits your personal needs without breaking the bank. Of course, there are limitations, as well as pros and cons, to many of the forms of credit available to those with poor credit scores, such as secured credit cards or subprime credit cards. But those options do give people choices they otherwise may not have. And they help you build credit, so that eventually you will have a greater number of options.



The information contained within this article was accurate as of September 18, 2014. For up-to-date
information on any of the terms, cards or offers mentioned above, visit the issuer's website.