Regardless of what it is, you know that getting the best deal often has a downside. For example, you might get the perfect place for the right price, but there may be strange noises throughout the night that you can’t figure out. Just as no credit check loans come with higher interest rates, those with poor credit may find that they can only qualify for credit cards with high fees and low credit limits. However, you can find credit cards for bad credit with no annual fee.
Many of the best credit-building cards have few, if any, fees and transparent rates.
What most credit card companies do is charge you to apply for the card. That way, they aren’t out any money and might make a buck if you choose to pre-qualify. In most cases, these credit card companies offer credit to anyone so that they can immediately take out the application fee. This lowers your credit limit up to $300, depending on the card and the price of the fee.
However, other credit cards charge the fee and require you to pay the fee from a debit card to see if you qualify. You pay a fee for something you might not get at all. Instead of paying money to potentially get rejected, you can avoid these fees by choosing a credit card that doesn’t charge application fees. That way, you can save your money for other things.
Don’t Accept the First One
Just because there aren’t any application fees doesn’t mean you should apply for all credit cards you find. You may not pay a monetary fee for the card, but you will still see a hard credit inquiry on your credit report.
A couple of hard inquiries won’t drop your score too much, but if you have many inquiries show up at once, it can do more damage. These hard inquiries can stay on your report for two years, so it’s best to apply for credit cards that are worth your time that you think you have a good shot for approval.
How to Find Credit Cards for Bad Credit with No Annual Fee
Once you’ve found some credit cards that don’t charge you to apply for them, it’s best to search out cards that don’t have an annual fee. If you have bad credit, you may think that this is impossible. However, you can find credit cards with no annual fee if you research your options thoroughly.
While some credit card companies only charge a minimal fee, such as $35 or less, others can charge up to $200 a year in fees. Along with such, some credit cards take out that fee as a large chunk on the anniversary of when you got the card while others take it out as a small monthly payment. Regardless, that fee you pay (either yearly or monthly) takes away from your credit limit.
If you have a high credit limit already, you’re likely to go over your limit, which is also reported to the three major credit bureaus and can look bad on your credit report.
It’s not to say that all credit cards that charge a fee are bad. Many specialty cards (rewards, miles, etc.) charge fees, but you make up the annual fee by earning reward throughout the year. The trouble is that people with bad credit don’t qualify for these types of cards.
Depending on why you want the credit card, you can find a variety of companies that don’t charge annual fees. Credit cards for bad credit with no annual fee can include store credit cards, secured cards, and others. Plus, if you choose a secured card, you might be able to go to a non-secured card when your credit score improves with time.
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