Credit Cards for People with Bad Credit History

If you have bad credit, you may feel like you have no options at all and that you can not get approved for any credit card. Even people whose credit needs serious improvement can get a credit card, however. The easiest and most reliable thing to do is to apply for a secured credit card. If you just need a credit card and you are not concerned with rebuilding your credit history, you can also get a prepaid credit card as another alternative. If you are insistent upon getting approved for a regular unsecured credit card despite your bad credit, you will have to put up with a few extra fees, but it is not impossible to get one.

Secured Credit Cards

A secured credit card is a great way to rebuild your credit history. With credit lines from $300 to $10,000, the amount of credit available to you is equal to a deposit made with the credit card issuer. In most cases, your monthly payments are reported to the three major credit bureaus so that you can begin to establish good credit again. With regular on-time payments for 12 to 18 months, it is likely you will start to get offers for pre-approved unsecured credit cards which you can apply for.

Pre-Paid Credit Cards

Getting a pre-paid credit card is a guaranteed way to get a credit card in your name. It works the same as a debit card. You will be required to deposit money to the account and as you make purchases, the money is debited from the account. With a pre-paid credit card, it is impossible to go into debt or to go over a credit limit. Unfortunately, the account history is not reported to the credit bureaus, so this is not a way to build up your credit history. A pre-paid credit card is only a good option if you are not looking for a way to re-build a good credit history and you are simply in need of a credit card to make hotel reservations, shop online, or make other transactions which require a credit card such as renting a car.

Unsecured Credit Cards for People with Bad Credit

There are many credit card companies that specialize in helping people with bad credit. These credit cards are associated with many extra fees which you should be aware of such as an “application fee”, a “one time processing fee”, an “annual fee”, and a “monthly processing fee”. In many cases these fees can add up to several hundred dollars which go against your available credit line and you will be required to pay down before you can even use the credit card. If the fees are not paid all at once, you will incur monthly interest on top of the fees which can lead to credit card debt and an even worse credit history.

If you have bad credit and you need to get a credit card, make sure you thoroughly research your options and make the choice which best suits your situation. Being responsible with your new credit card can help you re-build a good credit rating and can be a way for you to be approved for better credit card offers in the future.