How to get a credit card with bad credit
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- Figuring out how to get a credit card with bad credit takes a little more thought than simply opening a card when you have good credit or excellent credit.
- First, you want to check your credit score to confirm that you do have bad credit, and see exactly how high (or low) it is.
- Then, explore your options: Some major card issuers offer cards specifically for building or rebuilding credit, or you can open a secured credit card until your credit is stronger.
- Or, you could open a checking account with a debit card. That won't help build your credit, but it will provide a non-cash way to pay for purchases online and in person.
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If you have bad credit, though, it might not be impossible to get a credit card after all - it just might take some extra steps or ingenuity. Here's where to start if you need a credit card and you have less-than-admirable credit.
How to get a credit card with bad credit
1. Find out your credit score
If you're just guessing that you don't have good credit, or it's been a while since you checked, it's worth looking into again before trying to get a credit card.
It'll be hard to track your credit-score progress without knowing where you began. Banks often offer free credit-score tracking for customers, or you can check it for free at any time on sites like Credit Karma, Credit Sesame, and Credit.com. There is no need to ever pay for your credit score.
The credit-scoring company FICO issues five categories of credit scores:
- poor: 300-579
- fair: 580-669
- good: 670-739
- very good: 740-799
- excellent: 800-850
Note that for most things, you don't need perfect credit. Once you get solidly into "very good" territory, you should be able to get favorable terms from lenders.
If you find out that your credit score really isn't that great, looking into the perks of cards for people with better credit might just get in the way of focusing on your ultimate goal: finding a credit card you can score with the credit you currently have, and working on building up your score for better options in the future.
2. Apply for a credit card specifically geared towards people with bad credit
Before turning to secured credit cards - more on that below - it's worth looking into some of the regular, unsecured credit cards that offer products to people with bad credit. These cards might come with annual fees, but if you have a score that's generally between 300 and 639, you could get an unsecured card that will help grow your credit score until you qualify for another card.
Cards like the Credit One Bank Platinum Visa for Rebuilding Credit (no annual fee) and the Capital One Platinum Card (annual fee varies from $0 to $99) are marketed to people with limited or no credit history, who want to build or rebuild their credit.
If you're trying to build your credit from scratch, Petal Card is a new, fee-free credit card designed to do exactly that.
3. Try a secured credit card
One of the easiest ways for someone with bad credit to gain access to a credit card is through a secured credit card like the Discover it Secured, Capital One Secured, or Citi Secured.
A secured credit card requires a security deposit (hence, "secured"). The card issuer keeps this deposit, which is usually equal to your credit line, until you either upgrade to an unsecured card or close the account balance-free. Most secured cards allow you to convert to an unsecured version after you make on-time payments for a certain amount of time - generally after a year, although specific terms vary by card.
4. Become an authorized user on someone else's account
Before heading down this avenue, know that asking someone to be added as an authorized user on his or her account is a very personal thing.
If you do want to try this route, find someone you know well and whom you trust (and who has good credit themselves). The primary cardholder is responsible for the balance, whether the authorized user is spending responsibly or not - so you want to make sure that you fall in the former camp.
Also, if you are added as an authorized user, confirm that the credit issuer actually reports you as an authorized user to the credit bureaus. If you're not on file, it won't help you with your own credit score in the long run.
It's important to understand that a prepaid debit card will do nothing to help with your overall credit score. This type of card is simply an alternative way to pay for items without cash, except it's impossible to overspend with a prepaid card because you have a set spending limit.
If you have bad credit and are working on figuring out a way to secure an actual credit card, but you need a credit-card-like option in the meantime, a prepaid debit card can help you pay for things online, over the phone, or in a store without cash, and it will also help you stick to a set budget.
6. Stay the course and improve your credit over time
Even if you can't get a credit card with your score right now, you'll increase your chances if you continue to improve your credit. To do that, you'll want to get in the habit of making payments on time, tackle any outstanding debt, and keep an eye on your credit report and score in case of any fraudulent activity (and to watch your score increase over time!).
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