How to Get a Credit Card if You Have Bad Credit

Written on January 21, 2010 – 7:02 pm | by admin

There are many ways you can get a credit card, even if you have bad credit.

Open checking and savings accounts. When you’re starting on the long road to obtaining credit cards, you will want to begin in a very obvious place: your local bank. Open a checking account and keep it in good standing. Add a savings account at the same bank, even if you only keep $10 or $20 in it.

Place utilities in your name. When possible, transfer some household utilities to your name including the cable and electric bills. Having a phone in your name is also beneficial for your credit score and report.

Comparison shop. Shop around for the best interest rate and terms before applying for a credit card. Do not cast a wide net and apply for multiple credit cards at once in hopes that one will bite. Instead, compare each credit card’s annual percentage rate (APR), up-front fees, rewards programs or cash back bonuses, as well as convenience of payment methods. Also be aware of:

APRs: The U.S. Federal Reserve Board advises consumers to pay attention to the different APR terms of each credit card, as credit cards sometimes offer an introductory APR that will increase after a designated length of time. Low credit limits: Look for a card with a low credit limit or one that is within your monthly budget. You want to be able to pay off the entire balance each month before the due date. When you have bad credit, you may not be offered a high credit limit in the beginning anyway.

Gas cards. Set achievable credit card goals when you have bad credit; apply for a gas station credit card with the Visa or MasterCard logo. Gas credit card limits are typically set low in the beginning and they come with some sweet cash-back reward deals.

Department store credit cards. Department store credit cards may be easier to get when you have both bad credit and steady employment. Apply for a department store credit card when it has a special such as a 10 percent discount on your first purchase made with the card. Spend no more than you can afford to pay off when the credit card bill comes.

Bank credit cards. After you’ve shown financial responsibility by paying off your gas card or department store card bills on time, apply for a bank credit card such as a Visa, Discover, American Express or MasterCard. Be aware that with bad credit, the initial interest rate may be high, but you should be paying off the balance monthly and avoiding the interest rate anyway. If you have no luck with a bank credit card, consider a secured credit card, or have a family member co-sign the credit card application.

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