Credit card companies take numerous factors into account before approving credit card applications, such as your credit score and your number of existing accounts. Getting a credit card is fairly simple if you have a good credit score and little debt. But with poor credit, your options are few and many creditors may deny your application. Despite rejections, you can get a credit card with bad credit. You may not receive the best terms or the highest limit on this credit card, but it’s a stepping stone to better credit card offers.
- Open a bank account. You may not recognize the connection between opening a bank account and applying for a credit card, but the two are connected. When applying for a credit card, your application will ask if you have a savings or checking account. If you don’t have a bank account in your name, the creditor may see this as a sign of instability.
- Apply for a credit card with your bank. An active bank account with your bank not only shows that you can manage money, but also makes you eligible for credit cards offered by the institution. You have two options. You can apply for a secured credit card with your bank and pay a security deposit equal to no less than $200 to $500, or apply for a sub prime credit card. There are disadvantages and advantages to both options. Secured credit cards feature low, reasonable interest rates, but there’s the initial deposit plus set up fees. A sub prime or bad credit credit card does not require a security deposit, but you will pay a high annual fee and a high interest rate.
- Share a credit card account. If you’re looking to avoid security deposits and high fees, you can become an authorized user on another person’s account and piggyback off their good credit history. This is likely one of the simplest and fastest ways to get a credit card with bad credit because there is no application process. The primary accountholder makes one call to his or her credit card company and adds your name and Social Security number to the credit card account. You receive a credit card in your name within seven to 10 days and this account appears on your credit report within 30 days.
- Get a prepaid credit card. A prepaid credit card does not improve your credit score. However, if you’re not eligible for a credit card at this time, but need plastic to book an airline ticket or hotel reservation, prepaid credit cards are the solution. You can purchase these credit cards from many retailers. And upon activation, simply load funds onto the account. If you deposit $500 on your prepaid Visa or MasterCard, you have a credit line of $500. There are no monthly bills, interest charges or over-the-limit fees. Reload additional cash once you deplete your funds. Learn how to manage debt with a prepaid credit card and you can avoid serious credit mistakes once you’re approved for a standard credit card in the future.
Getting a credit card with bad credit and using it responsibly is your first step to improving your credit score and improving your financial future.