3 Tips to Apply for Credit Card with Your Bad Credit History
Bad credit history shouldn’t stop you from applying for a credit card. A good credit score indeed is one of the requirements of a credit card application. However, nowadays, you can find many ways to get a credit card; even if you have a low credit score. So, continue reading to find more about a credit card with bad credit.
The Credit Card And Bad Credit Score
The first thing you should know is the connection between credit cards and credit scores. Why should you have a good credit score to apply for a credit card? Why the credit card company won’t approve your application if you had a bad credit score? Let’s see the answer.
First of all, a credit card is a tool where you can borrow money from a credit card company without collateral. You only promise them to pay that borrowed money. Unlike a mortgage loan or car loan, you have property or car as the collateral or guarantee. The credit card doesn’t have that. For that reason, the credit card company uses your credit score to measure the risk of lending the money to you.
A good credit score comes from how people always pay the debt on time before the due date. Plus, they always pay it in full. Abad credit score means the opposite of all of those. Therefore, the credit card company sees an applicant with bad credit as a high-risk subject. They won’t risk their money with the highest probability of losing it.
Best Credit Card for Bad Credit Score
Fortunately, there are several types of credit cards you can apply for, even if you have a bad credit score. These credit card products have a higher chance to approve your application. So, let’s see what they are:
- Secured Credit Card
As we explained above, when you apply for a credit card, you don’t use any object or asset as collateral. You depend solely on your credit score. However, a secured credit card uses a different approach in this matter. This credit card type uses deposit money as collateral.
Yes, you should pay the first deposit before you apply for this credit card. As for the amount, it depends on the company where you apply for it. Some of them accept as little as a $200 deposit, while others need more than that.
With the first deposit as the collateral, you will have a higher chance to get approval for this credit card. Once you get it, the amount of the first deposit also becomes the limit of your credit card. So, make sure you use below that limit. Moreover, pay the credit card in full every month before its due date. That also helps you to build your credit score.
If you do it correctly, you can even improve and repair your credit score by using this credit card. We can even say that the secured credit card is the best choice for you who have a bad credit history. However, make sure you apply it from the best and trusted company to avoid problems in the future.
- Store Credit Card
The other type of credit card you also can apply for with your bad credit record is the store credit card. As its name implied, a specific store issues this card. So, you won’t get it from the bank like the usual credit card. You can visit the store and apply there or use their official website. Sometimes, the staff will also offer and promote it when you pay in the cashier of that store.
The reason why we put it as the best credit card with bad credit is it doesn’t require a high credit score to apply. It accepts low credit scores, even lower than 630 points, which is the number that can be considered a bad score in your credit history.
Moreover, the application process is also much easier than the standard credit card. You can get it instantly. For example, you can apply for it while paying for your items in that store. Enter your personal information, such as your Social Security Number, and in a minute, you get the credit card. The online application has a similar application process. Once you apply, you can take it from the store.
Even though it doesn’t require perfect credit history, you also have to understand the risks of applying for this card. First of all, it has high fees and interest rates. Make sure you apply it when you think you can pay it off. The other one is you can only use it at the store that issues the card. So, only choose the card from the store that you frequently visit to buy your needs.
- Unsecured Credit Card
All standard credit cards are unsecured. However, there is a particular credit card that is promoted for people with bad credit. This unsecured credit card also can help you to get the credit card that you want. It doesn’t require a high credit score. You also can apply for this card without a credit history. But, we don’t recommend this card for you. Use it only for the last resort, if you need a credit card.
The unsecured credit card for bad credit has very high fees and interest rates. Furthermore, the issuer also uses complicated rules and agreements that only give you more burdens. Worst of all, it doesn’t matter how you use this card, mostly, it will only make your credit score even worse. Why?
It has high fees and interest rates. It gives you more financial burdens to pay. Because of that, in most cases, you won’t be able to pay it. Therefore, it keeps giving you a bad credit report. Then, if you close it, it will damage your credit score. Therefore, you might find this type of offer during your research of finding the best credit card for bad credit. If you find one, we recommend you avoid them.
Tips to Apply for Credit Card with Bad Credit
After you know the type of credit card you can apply for, here, we have several tips to apply for a credit card with bad credit.
- Find the company that always sends the credit report to credit bureaus for improving your credit score.
- Find one that has low fees. Make sure it also doesn’t charge you an annual fee.
- Find the company that provides free credit score checks. It helps you to track your credit score condition when you use their card.
- Find the company that also offers the upgrade to the standard version of a credit card. It helps you to save time for the complicated application process, once your credit score becomes much better.
Now, you have all the basics that you will need to apply for a credit card with bad credit. Make sure you choose carefully, so the credit card won’t make your financial condition worsened. Also, try to discuss it with the expert or your family. If you think you don’t have the ability to pay the credit card bills and fees, we recommend you avoid the credit card first and focus on repairing your credit score.
We provide a good guide for you about Credit Card