Credit Card With Poor Credit

| January 3, 2012

Getting a credit card with poor credit may be difficult to do, but it isn’t impossible. People with poor credit may think that their options are limited, but this isn’t necessarily the case in most situations. There are several options that a person with poor credit has when it comes to getting a credit card. Let’s take a look at some of those options.

One way to get a credit card with poor credit is to get a secured credit card. These are cards that you basically back with your money. If you put $250 into an account, you then will have a $250 line of credit. These cards can be used by a person with less than desirable credit to build their credit back up. The financial institution that issues you the secured credit card isn’t taking a risk because you are backing the card with your own money. If you make payments on time, the financial institution may reward you more credit without asking you to put more money into your credit account. You can build your way up to higher credit limits with these cards and you can also carry more than one.

Another way that you can get a credit card with poor credit is to get an unsecured card. Since you have less than desirable credit, a financial institution is taking a big risk by extending you credit. An unsecured credit card for a person with bad credit will reflect that risk. It will have high up front fees that you must pay to get the card and it will also have a high annual interest rate. The credit limits on these cards can be low, sometimes the limit on the line of credit is only $200. The upfront fees on these unsecured cards can range from $100 to $500. As for the annual interest rates, expect the annual rates of interest to be 25% or higher. These numbers may sound intimidating, but if you need a credit card and plan on building your credit rating back up, these are factors that you will have to deal with.

Those are two ways that a person can get a credit card with poor credit. There is no rule that stops a person from pursuing both avenues at the same time. As long as payments are made on time and you don’t charge near your credit limit, your credit rating will start to creep back up.

Category: Bad Credit Loan

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