Having bad credit isn’t the end of your ability to get a credit card. As a matter of fact, you need to get a new credit card in order to rebuild your credit score. However, you will have to accept some terms that would not be acceptable if your credit score were better.
One solution is the secured credit card. With a secured card, you pay a deposit, which decides your credit limit. You still have to pay the credit card off as usual; the deposit ensures that the company will not lose money on you if you quit paying. But don’t just quit paying - the idea behind a secured credit card is to build your credit, and just using up your deposit won’t help.
Unsecured credit cards are probably a better way to go for most people. As with any credit card offer for people with bad credit, expect the interest rates to be high. However, as you are needing to build your credit score, this is literally the price you have to pay.
Unsecured credit cards also typically have low limits, maybe a couple hundred dollars. This limits the risk of the card issuer, let still allows you to show that you can handle a credit card. If you like, you may even find a card that gives you points toward rewards. However, these typically come with either higher yet interest rates or higher fees, such that they offset any possible benefit you could get from the points.
Watch out for offers that say they can get a credit card for any credit score, no matter how poor. The more risk a company takes on you, the more they will be charging you. Be careful about the offers that you accept, and prefer a lower limit to a higher one. This will make it easier to build your credit score without sinking further into debt.
An unsecured credit card with a cash advance is generally a better solution than getting a payday loan when you need cash. Payday loans often have outrageous interest rates when you add it up. Cash advances through a credit card charge more than purchases in most cases, but they still cost far, far less than a payday loan, and you might have more time to pay it off.
No matter how poor your credit is, pay careful attention to the terms and conditions of your credit cards. These will help you to determine whether or not the card is a good deal for you. You need to know what happens if things go wrong and you are late with a payment and what fees you can expect to pay in various situations. Rebuilding your credit takes a lot of time and you do not want to fall into the same traps that caused you to have poor credit in the first place.
Know Your
Credit Cards