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Are there credit cards for people with poor credit histories?
Yes, there are credit card options for people with poor credit histories. In many cases, it’s possible for people with a poor credit history to obtain either a secured or unsecured credit card. These cards normally have higher interest rates and fewer perks than credit cards for people with better credit scores. Despite the downsides, they provide a good opportunity to pay credit card bills on time and may raise your credit score.
Some credit cards for people with poor credit histories require security deposits. In such cases, the security deposit will become your credit limit. This gives the company the security of knowing you won’t default on any credit card balances you owe if payment is not made.
Should someone with poor credit consider applying for a credit card?
Yes, people with poor credit should still consider applying for a credit card. Many people think they are ineligible for a credit card because of their low credit score. However, this is rarely true. Some companies even make specific cards intended for consumers with low credit. These cards provide the opportunity to rebuild credit and may allow you to raise your credit score so you’ll be eligible for better cards in the future.
Your credit will not fix itself, and in most cases, applying for a credit card is the first step to raise your poor credit score. Then if you're approved, keep your balance under the credit limit, and make on-time payments. Although it can be daunting to face your fear of rejection and apply, it’s best to get the application process out of the way so you can get on the road to try improving your credit score.
What type of credit score is typically considered poor?
By the VantageScore credit scoring system, anyone with a credit score below 550 is generally considered to have poor credit.
Can credit cards for poor credit help improve your credit score and history?
If you use credit cards for poor credit responsibly, it’s possible to improve your credit score and build a history of good credit. By paying your credit card bill on time each month, you can establish good credit history.
Even if a credit card has a very high interest rate or requires a security deposit, using it properly will rebuild your credit and improve your credit score. By properly managing your finances, eventually you will qualify for better credit card offers and be able to leave the cards for poor credit behind.
Eventually your past credit errors will be improved by good credit decisions and lenders will be much more likely to trust you. You will be able to qualify for better interest rates on loans and credit cards, as well as better rewards programs and sign-on bonuses for credit cards.
It’s important to remember that prepaid debit cards will not improve your credit score or credit history. These cards will not show up on your credit report at all.
Are there unsecured credit cards for poor credit scores?
Yes, there are unsecured credit card options for people with poor credit scores. These credit cards don’t require a security deposit, but they typically have higher interest rates than secured credit cards. Some of these cards have interest rates as high as 25%. Your interest rate will be calculated by your credit score, so if your score is extremely low you can expect very high interest rates.
This is why it’s important to carefully read about each credit card that you apply for. Besides very high interest rates, some unsecured cards for poor credit may have other downsides, such as stiff penalties for missed payments. By taking time to read your cardholder agreement and becoming familiar with the rules of your card, you’ll be able to make an informed decision about what card is right for you.
Some people don't like the sound of a secured credit card so their automatic reaction is to seek an unsecured card. However a secured card can be a useful tool to build up your credit score and get your credit back on track. They should not be automatically dismissed. In fact, many secured credit cards offer better interest rates and opportunities than unsecured cards for people with poor credit.
Are there credit cards for people with poor credit that are instant response?
Yes, there are credit cards for people with poor credit that are instant response. Some credit cards have an extremely fast application processing time and will give you an answer in seconds. However, these credit cards are somewhat rare for people with bad credit and are usually not put out by major credit card companies. Generally the instant response cards intended for people with bad credit are put out by smaller companies.
Additionally, some companies will charge a “program fee” for instantly accepting your application which most people would be better off avoiding. Always carefully read the fine print before applying for instant response credit cards to ensure you won’t be charged a program fee.
Some instant response cards expect the customer, if approved, to be impulsive and to agree to their terms without carefully reading the cardholder agreement and becoming familiar with the card. Therefore, these cards can have hidden fees and other downsides. It’s not uncommon for them to have annual fees as well as programming fees and high interest rates. Always make sure you know what you’re signing up for before making a commitment.
Are there cards for poor credit that have no deposit required?
Yes, there are credit cards for poor credit that have no deposit required. However, it can be difficult to find these cards. Most credit cards intended for people with bad credit require some sort of payment or deposit to make purchases. This is because credit companies are attempting to prevent people from opening accounts and ringing up a large credit card bill with no intention of ever paying it off.
Although credit cards without a deposit are available for people with poor credit, they may have downsides such as higher interest rates than the ones that require a deposit. It’s important to keep this in mind while shopping around for credit cards, because a high interest rate could end up being a bigger disadvantage than a security deposit in the long run.
A deposit is not necessarily a bad thing, and in many cases the deposit is refundable or can go towards your last credit card bill with the company.
Do poor credit credit cards have an annual fee?
Most credit cards intended for people with poor credit have an annual fee. It’s possible to find ones without the annual fee, but they may have other downsides instead. For example, a card without an annual fee may have a much higher interest rate than one with a fee. The increased interest could end up costing you more money in the long run, so it’s important to carefully analyze each card’s advantages and disadvantages before committing.
Although it can be frustrating to have limited choices for cards with annual fees, it’s important to remember that the poor selection is temporary. By building your credit using a card with an annual fee, you’ll soon be eligible for better offers from cards with no annual fee.
Are there Visa and Mastercard branded offers for people with poor credit scores?
There are Visa and Mastercard branded offers available for people with poor credit scores. They may have to apply through another smaller company to obtain the card, but the card will be endorsed by Visa or Mastercard and have one of their logos in the corner. This means that the offer terms are determined by the smaller company that puts out the card, but the card itself is backed by Visa or Mastercard.
Will I be able to fix my credit mistakes if I’m accepted for a new credit card?
Although your old credit mistakes may linger on your credit report for up to 7 years, it’s possible to outweigh them with a good credit history. If lenders see that you made mistakes a few years ago but have since improved your credit management skills, they’ll be much more likely to allow you to borrow money.
Many people successfully improve their credit score even after making mistakes and poor financial decisions. By making purchases on a new card, paying your balance on time and carefully managing all your debt, you’ll be well on your way to improving your credit score and fixing your past mistakes.
Are there other things I can do besides applying for credit cards that may raise my low credit score?
Without making payments on a credit card or a loan, it’s difficult to raise your credit score. You need to have some sort of credit activity in order for your score to increase.
Applying for a loan or mortgage and making payments on it may also raise your credit score, but the principle is the same as a credit card because you’re still paying off a debt.
You don’t necessarily need to apply for new credit cards in order to raise your credit score. It’s possible to raise it by making changes to your current credit card habits instead of applying for new cards. Consider paying off all of your current balances before making new unnecessary purchases. Make sure you never miss a payment. By properly managing your current debt and not taking on any new burdens you may be able to raise your credit score.
How long will it take to raise my credit score from poor to good so I can apply for a better credit card?
There’s no solid answer for how long it will take to raise your credit score from poor to good. It depends on how often you use your credit cards, how close you get to your spending limit each month, whether or not you always pay your bill on time, and a number of other factors. It will most likely take at least a few months to start seeing a real difference, and around a year of good credit card management to start seeing some serious improvement.
These numbers are different for everyone and depend entirely on your individual spending habits. For some people it will be shorter and for others it will be a lot longer. If you work on changing your spending patterns, eventually paying your credit card bill on time and properly managing your debt will become habit.
If a family member adds me as an authorized user on their credit card, will this improve my credit score enough for me to get my own card?
Becoming an authorized user may increase your credit score and get you on your way to having a good credit history. It’s impossible to say if this one activity will raise your credit score enough to qualify for your own card. It depends entirely on what your credit score was in the past and also on the cardholder’s spending habits.
For some people it’s possible to raise their credit score enough to qualify for their own credit card simply by becoming an authorized user. For others, it’s not enough.
When becoming an authorized user, always make sure the account holder has responsible habits and pays their credit card bills on time. Also, always remember to be respectful and pay your share of the bill on time every month. Becoming an authorized user is a great way to improve your credit score while also learning responsible credit card habits.
What happens if I miss a payment on my credit card for poor credit?
Credit cards intended for people with poor credit can have stiffer penalties than regular credit cards. By missing a payment you risk being hit with steep late fees and having your interest rate go up. While late payments on regular cards might be $25 to $35, certain cards for people with poor credit can charge up to $60 for a single 30-day late payment. If you’re more than 30 days late the fees increase even more, and you could end up with hundreds of dollars in late fees alone if you let it get out of hand.
Additionally, your credit score will be impacted by your late payment and all of the hard work you’ve done to raise your credit score would be offset. Your credit score could be lowered up to 110 points for a single late payment, depending on how long you let it go and how much money is owed.
You should make every effort to pay your bill on time, unless there are extraordinary circumstances, in order to avoid steep late fees.
Do cards for poor credit have rewards programs?
Most credit cards for people with poor credit don’t have rewards programs. If they do, they’re usually not as good as rewards programs on regular credit cards. You’ll earn rewards at a slower rate and the rewards themselves are generally not as enticing as they are with other cards. However, it’s still possible to earn some rewards points as long as you don’t mind the slower rate of earning.
Do credit cards for people with poor credit have sign-on bonuses?
Credit cards for people with poor credit generally do not have sign-on bonuses. Companies use these bonuses as incentive to get people with good credit to sign up for their card. They generally won’t offer them to people with poor credit because they aren't confident in their credit history enough to give them a reward. By carefully building your credit and improving your credit score with a card intended for poor credit, you can eventually raise your score enough to qualify for cards that offer sign-on bonuses.
What happens if I apply for a credit card intended for people with poor credit and get denied?
If your credit card application is denied, the best thing you can do is research other credit cards that are more likely to accept you. Your credit score may drop a few points because of the hard inquiry on your credit report from the application, but the damage is minimal and easy to repair.
If you’re having trouble getting accepted for credit cards for people with poor credit, consider applying for a secured card instead, if you haven’t already. You could also see if a family member will add you as an authorized user on their account, which may help you to raise your credit score so you’re more likely to be accepted for your own card.
How can I properly use my credit card to ensure my credit score goes up?
One good technique for using your credit card is to make sure you never charge it up close to the limit. To understand why doing this is a bad thing, let’s take a look at credit utilization. When your credit card balance is close to your credit limit, your credit utilization goes up and this can negatively impact your credit report. Credit utilization is a ratio that compares your available credit to your credit limits. As long as your credit utilization is below 50%, your credit report will not be negatively impacted. However, when it gets higher than 50% your credit score may be lowered.
For example if your credit card balance is $500 and your credit limit is $2,000, your credit utilization is measured at 25%. This value is considered good and will not impact your credit score. However, if your credit card balance is $1,500 and your credit limit is $2,000, this means your credit utilization ratio is at 75%. This is considered poor credit utilization and could end up lowering your credit score.
By being mindful of proper credit utilization you can avoid blows to your credit score and build good credit history. This is simply one of many techniques you can practice to increase your credit score. Always set reminders to pay your bills on time and avoid late payments at all costs. Never make a purchase if you don’t think you’ll be able to pay it back. Remember that every credit decision you make could end up impacting you for years to come.
My credit card was lost or stolen and I had fraudulent charges that damaged my credit report. Can I get the damaging information removed?
If your credit card was lost or stolen you are never responsible for the fraudulent charges. If you noticed fraudulent activity on your credit card bill, contact your credit card company immediately. They will be able to remove the charges from your statement and prevent it from impacting your credit history.
However, sometimes errors are made and the fraudulent activity will still show up on your credit report. If this occurs you’ll be able to contact one of the three credit bureaus (TransUnion, Experian, or Equifax) that reported the error and they will be able to revise the report. You can choose to report the error online or by phone.
If you’ve been a victim of fraud, there’s no need to worry about long-term damage to your credit score because credit card companies are very familiar with the situation and know exactly how to fix it. Simply contact them and they will make things right for you.
Will I be able to qualify for a credit card for people with bad credit after bankruptcy?
It will be difficult to qualify for a credit card soon after going through bankruptcy. However, many credit card companies are still willing to give people a chance after they have gone through this life-changing event. If they see you have a decent income and have changed your spending habits since filing for bankruptcy, they will be much more likely to give you a credit card.
Furthermore, if the bankruptcy was a few years in the past you will be much more likely to be considered for a credit card. If time has passed and you show signs of altering your spending habits and being able to better manage your finances, you stand a decent chance at getting a credit card even after bankruptcy.
If you’re having trouble qualifying for a credit card after bankruptcy, consider applying for a secured card. These are much easier to get than other credit cards and may help you improve your credit score.