If you have bad credit and want to get a credit card, it can appear daunting. You may be uncertain of the best way to go about obtaining a card with your current financial situation. Here are five steps you can take to get a credit card with bad credit that will ensure you have the best outcomes in terms of fees and rates while establishing yourself as a responsible borrower. This blog post will discuss understanding your credit score, considering secured cards or pre-paid cards, seeking opportunities for credit building, checking for fees and rates, and managing your credit responsibly.
Understand Your Credit Score
Understanding your credit score is an important step in the process of obtaining a credit card with bad credit. Knowing what your credit score is can help you determine whether it is feasible to apply for a card, and which type of card may be best for your situation. It’s important to remember that a good or excellent score isn’t necessarily required to get a card; even those with poor credit have been successful in obtaining a card, as long as they understand their options and take the right steps. Checking your report and correcting any inaccuracies before applying can also improve your chances of success.
Consider Secured Cards Or Pre-Paid Cards
If you have bad credit, another option to consider is a secured card or pre-paid card. A secured card functions like a regular credit card but requires an upfront deposit that acts as collateral against the debt. You can use the secured card just like any other credit card and it will help build up your credit score. Pre-paid cards are different in that they do not require an upfront deposit or affect your credit score. They work much like debit cards, where you only spend what you have loaded into the account. Both types of cards can be useful in helping build up your credit over time when used responsibly.
Seek Out Opportunities For Credit Building
If you have bad credit, it may seem difficult to get a credit card. However, there are ways to improve your credit that don’t involve taking on additional debt. One of the most effective strategies is to seek out opportunities for building your credit. This can include joining a credit union or signing up for a secured card with a low limit but regular reporting to all three main credit bureaus. As long as you keep up with the payments and stay within your limit, these forms of credit help build your score and prove that you can be trusted with more debt in the future.
Check For Fees And Rates
When considering a credit card for those with bad credit, it is important to check for any applicable fees and interest rates. Many credit cards designed for those with poor or no credit come with higher costs associated than more traditional cards. Be sure to read the fine print of any offers you receive carefully so you understand exactly what charges you may be responsible for and can compare different types of cards side-by-side. Additionally, many major issuers have online calculators that can help you determine how much interest your balance will accrue over time.
Manage Your Credit Responsibly
Managing your credit responsibly is one of the most important steps you can take to get a credit card with bad credit. Making sure you pay off your bills on time, not spending beyond your means, and monitoring your credit regularly are all essential in keeping your credit score healthy. Additionally, establishing positive payment history by making small purchases and payments in full and on time is also key for maintaining a good standing with creditors. Taking these steps will allow you to return to financial stability and help you secure a credit card even if you have bad credit.
OpenSky by Capital One
OpenSky is a credit card issued by Capital Bank, designed for people with bad credit or no credit history. The card is unique in that it doesn't require a credit check, making it an excellent option for those who have been turned down for credit in the past.
One of the main advantages of the OpenSky credit card is that it can help build or improve your credit score. The card reports to the three major credit bureaus, which means that responsible use can have a positive impact on your credit history.
Another benefit of the OpenSky card is that it offers a reasonable annual fee and a low APR. The annual fee is $35, which is much lower than many other credit cards for people with bad credit. The APR is 17.39%, which is also relatively low compared to other cards in this category.
The OpenSky card also offers a credit limit of up to $3,000, which can be useful if you need to make a large purchase or want to consolidate debt. However, keep in mind that your credit limit will be based on your income and credit history, so you may not qualify for the full $3,000.
One of the downsides of the OpenSky card is that it doesn't offer any rewards or cashback programs. This means that you won't earn any points or cash back on your purchases, which can be a drawback if you're looking to maximize your rewards.
Another potential downside is that the OpenSky card requires a security deposit. The security deposit is used as collateral against your credit line, which means that if you default on your payments, the bank can use your deposit to cover the outstanding balance. The minimum security deposit is $200, and the maximum is $3,000.
Overall, the OpenSky credit card is a good option for people with bad credit or no credit history who are looking to build or improve their credit score. The card has a reasonable annual fee and a low APR, and it reports to the three major credit bureaus. However, if you're looking for a card that offers rewards or cashback programs, you may want to consider other options.
Fortiva Credit Card
The Fortiva Credit Card is designed for consumers with less-than-perfect credit, offering a way to rebuild credit scores. However, it comes with high fees and interest rates, making it important to carefully consider whether it is the right choice for your financial situation.
The application process is straightforward, and approval decisions are typically made quickly. The card comes with a credit limit of up to $800, which can be increased over time with responsible use.
One downside is the fees associated with the card. There is an annual fee, as well as a one-time processing fee when the account is opened. Additionally, the interest rate on purchases is high, so it is important to pay off balances in full each month to avoid accruing interest charges.
Overall, the Fortiva Credit Card may be a good option for those with less-than-perfect credit who are looking to rebuild their credit scores. However, it is important to carefully review the terms and fees before applying to ensure it is the right choice for your financial situation.
In conclusion, getting a credit card with bad credit can be done if you follow these five steps. It is important to recognize that building your credit is an important step in financial health, and should not be ignored. Being mindful of your spending and always paying on time are two major components of improving your credit score over time. Additionally, it is important to remember to research all the credit cards available before selecting which card best fits your needs and budget. Once you have taken all these steps, you will be well on your way to getting a good deal on a secured or unsecured credit card even with bad credit.