How to Get a Credit Card with Bad Credit
Have a deposit ready., Research lenders with secured credit card offers., Get a secured credit card that reports your payments to credit agencies., Compare interest rates and fees., Look for cards with incentive awards., Transition to an unsecured...
Step-by-Step Guide
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Step 1: Have a deposit ready.
To get a secured credit card, the bank will require you to deposit money into a bank account.
The credit company then grants you a credit card with a line of credit up to the amount of money that you have on deposit.
Vendors will see your credit card as a “regular” card and won’t know that it is secured.You may be able to find a bank that will grant you a credit limit that is a bit higher than the amount that you deposit.
However, in most cases, your "credit" will be limited by the amount that you have in the account.
That way, the bank will be assured that they will get paid. -
Step 2: Research lenders with secured credit card offers.
Even though the credit card is secured, you still need to do some research and pick a good offer.
Secured cards have rules and interest rates that make some offers better than others.
You should do some research and find the offer that best fits your needs.Check with your own bank first.
The local bank that you already use for savings or checking may offer a secured credit card plan that can help you.
The bank may not advertise a secured card, but you should ask a lending manager to find out.
Use the Internet as well.
Search for “secured credit card,” and you will find numerous offers.
Review the offers and contract terms to find one that seems good to you. , You will want your secured card to help you begin rebuilding your good credit.
You need to make sure, then, that the lender will report your payments to the credit reporting agencies.
Not all secured cards will do this.
When you apply, check the contract to find out.
If the contract does not say, ask the lending manager.The three major credit reporting agencies in the U.S. are Equifax, TransUnion and Experian.
They receive reports from your creditors about your payments and use that information to compute your credit score.
If you are making your payments on time for your new secured card, you will want them to receive that information.
At the site, CompareCards.com, you will find a list of ten different credit card offers.
You can review these to find which will “Report to Credit Bureaus” or “Build Credit When Used Responsibly.”, Secured credit cards vary in the terms of repayment and interest rates and fees, just as regular credit cards do.
You should do some basic research and compare the interest rates and fees that various lenders will be charging.
Although you may feel that your bad credit limits your options, you still have some choices., Even secured credit cards may offer incentive awards to try to get your business.
Some lenders offer cash back awards on the the purchases that you make.
Look for a lender with a strong offer.
Try to find cash back on items that you purchase regularly, so you can make the most use of the offer.
By using the card regularly and wisely, these incentives can almost earn money for you., In the beginning, you will have to work with the terms of your secured credit card.
If you pay your monthly bills on time, you may eventually be able to apply to your bank for a “regular” unsecured credit card.
If you are a good customer, you may be able to reach this level within about a year. -
Step 3: Get a secured credit card that reports your payments to credit agencies.
-
Step 4: Compare interest rates and fees.
-
Step 5: Look for cards with incentive awards.
-
Step 6: Transition to an unsecured credit card when you can.
Detailed Guide
To get a secured credit card, the bank will require you to deposit money into a bank account.
The credit company then grants you a credit card with a line of credit up to the amount of money that you have on deposit.
Vendors will see your credit card as a “regular” card and won’t know that it is secured.You may be able to find a bank that will grant you a credit limit that is a bit higher than the amount that you deposit.
However, in most cases, your "credit" will be limited by the amount that you have in the account.
That way, the bank will be assured that they will get paid.
Even though the credit card is secured, you still need to do some research and pick a good offer.
Secured cards have rules and interest rates that make some offers better than others.
You should do some research and find the offer that best fits your needs.Check with your own bank first.
The local bank that you already use for savings or checking may offer a secured credit card plan that can help you.
The bank may not advertise a secured card, but you should ask a lending manager to find out.
Use the Internet as well.
Search for “secured credit card,” and you will find numerous offers.
Review the offers and contract terms to find one that seems good to you. , You will want your secured card to help you begin rebuilding your good credit.
You need to make sure, then, that the lender will report your payments to the credit reporting agencies.
Not all secured cards will do this.
When you apply, check the contract to find out.
If the contract does not say, ask the lending manager.The three major credit reporting agencies in the U.S. are Equifax, TransUnion and Experian.
They receive reports from your creditors about your payments and use that information to compute your credit score.
If you are making your payments on time for your new secured card, you will want them to receive that information.
At the site, CompareCards.com, you will find a list of ten different credit card offers.
You can review these to find which will “Report to Credit Bureaus” or “Build Credit When Used Responsibly.”, Secured credit cards vary in the terms of repayment and interest rates and fees, just as regular credit cards do.
You should do some basic research and compare the interest rates and fees that various lenders will be charging.
Although you may feel that your bad credit limits your options, you still have some choices., Even secured credit cards may offer incentive awards to try to get your business.
Some lenders offer cash back awards on the the purchases that you make.
Look for a lender with a strong offer.
Try to find cash back on items that you purchase regularly, so you can make the most use of the offer.
By using the card regularly and wisely, these incentives can almost earn money for you., In the beginning, you will have to work with the terms of your secured credit card.
If you pay your monthly bills on time, you may eventually be able to apply to your bank for a “regular” unsecured credit card.
If you are a good customer, you may be able to reach this level within about a year.
About the Author
Robert Butler
A passionate writer with expertise in lifestyle topics. Loves sharing practical knowledge.
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