Credit Cards for People with Very Bad Credit

Credit cards for those with very bad credit are hard to obtain. However, they are several types of credit cards that give borrowers a chance to rebuild their credit history and start anew.

Credit Card Options

In order to rebuild your credit, you need to show you can use a credit card responsibly. The options include:

• Department store or gas credit cards: Credit cards that allow customers to get discounts and rewards on products sold and issued by the institution providing the card.

• Secured credit cards: These cards work like ordinary credit cards, except the credit limit is 50-100% of the deposit. They also have a number of fees that ordinary credit cards do not.

• Cards from local banks: Credit cards issued by neighborhood and village banks.

Credit Cards to Avoid

When trying to rebuild their credit history, avoid the following types of credit cards:

• High-rate credit cards: Credit cards with interest rates and other fees that are so high they make up over 50% of the credit limit.  

• Prepaid credit cards: Credit cards that essentially work like gift cards. Its users add money, spend it and add more money. They are not reported to credit bureaus, so using them does not help people repair their credit history.