If you are looking for a credit card to repair your history and you still don’t know which one to choose, this article is for you. Next, we will describe the steps to request this type of card. In addition, you will have the possibility to know which are the most feasible offers for approval, currently. If you want to know more information, continue reading.
Characteristics of Credit Cards for bad credit
Credit cards for bad credit are ideal for helping people whose credit score is between 300 and 639. Likewise, with this type of product, you can rebuild your history and opt for better offers in the future. The best cards in these cases have annual fees as low as $0. In fact, some offer rewards equal to 1% cashback cash back or more on purchases.
All issuers of these cards comply with monthly credit reports. These reports are issued directly for subsequent approval at the credit bureaus, this is a recurring process (sometimes sponsored). This point is very important since it guarantees the possibility of reconstructing your history and opting for better cards when you have increased your score.
The correct credit card for most people with bad credit will be a secured card. Secured credit cards charge lower fees and offer better approval rates. However, in case you need loans, you should resort to unsecured cards. In the end, the requested product will depend solely on your specific needs.
Types of Credit Card for bad credit
Cards with Guarantee
These are the most famous and recommended credit cards for people with bad credit history. These types of products are different from conventional credit cards as they require a deposit as a guarantee. This deposit is refundable and is ideal for opening your bank account. Likewise, by making a deposit you are demonstrating that you have better opportunities for the approval of your application.
These types of cards are used by those who need to improve or establish their credit record. A guaranteed financial product, reports your payment history to the 3 main credit bureaus in the United States. If you use these cards responsibly you can quickly improve your credit history or build it.
Unsecured Cards
This is the second great classification for credit cards of this type. These are cards very similar to conventional credit cards. In this case, you do not have to make any deposit as a guarantee for the application. Therefore, they are a little more difficult to qualify for when you have bad credit. With this option, you apply to cards with lower benefits and much higher interest rates.
This can be a good alternative for those looking for access to a no deposit line of credit. Finally, these cards usually have lower interest rates than personal loans for people with bad credit; In addition, they are much safer and more reliable.
Best Credit Cards for bad credit
It’s for you if: You like balance transfer credit cards or if you need to improve your credit score.
Type of card: Recompensas / Rewards, No Annual Rate / No Fee, Zero Annual Interest / 0% APR, Low Annual Interest / Low APR, Transfer Balance / Balance Transfer
Quote and Compare Credit Cards for bad credit
Before requesting this type of card, it is important to consider the following recommendations:
- You must be up to date with all late payments. These types of credit cards will not be approved for applicants with recent delinquencies.
- Compare the rates of all your options. The best credit card of this type will have a low cost. On the other hand, one way to keep costs down is to find a card with low (or no) annual fees, monthly fees, and one-time fees.
- Always try to pay bills in full, this way you will avoid interest charges.
- Look for secured card options, these products will guarantee you a high probability of approval. Secured credit cards offer the best chances of approval because they require a security deposit to act as your line of credit.
- Secured cards are not always approved. These products operate under guaranteed approval, but most will still run a legal credit check. In fact, certain items on your credit report can disqualify you.
What does “bad credit” mean?
Bad credit is generally defined as a credit score below 630. The credit scale runs from 300 to 850 points. These scores are able to measure the risk of lending money to someone. Therefore, the higher the risk, the lower the score. Common errors such as Missing multiple payments, max accounts, bills delivered to collection agencies, etc., will harm your credit history.
I don’t have a credit history yet. Is that considered bad?
In many ways, having no history is equivalent to bad credit, you have also considered a higher risk because you have not yet demonstrated your ability to handle money loans.
Can I get a credit card if I have bad credit?
Yes, it’s no secret that multiple issuers have cards designed specifically for people with bad credit. These cards are often described as “credit rebuilding products.” Cards of this type do not offer rewards or advantages, charge high-interest rates and some of them have high costs.
Are secured credit cards my only safe option?
A secured card is not your only option if you have bad credit. However, it may be the best offer you will receive. Some issuers offer regular “unsecured” cards for people with bad credit; however, it is not a good idea as it represents a higher risk with a deposit that you cannot get back.
What do I need to apply for this type of card?
You must be at least 18 years old and have a Social Security number to be considered for a credit card. In addition, you need as a fundamental requirement, the approved American residence. In most cases (it does not apply to all) it is necessary that you have a bank account.
