If you’re like many people, your credit is less than exemplary, and most people have bad credit. While you may want to improve your credit score first, you may find it easier to improve your scores when you have a credit card. The question then becomes ‘what credit card can I get with bad credit?’ The answer might surprise you!
While most people think that credit cards are evil, you have to know how to use one effectively so that you can rebuild your credit. You should use the card periodically (such as once a month), and it is best if you can pay the entire balance off each month. That way, you avoid interest fees and carrying a balance.
What Credit Card Can I Get with Bad Credit?
The fact remains that most people can’t apply for or be qualified for a rewards card or one with perks. In fact, most people with low credit scores get adverts in the mail for cards with higher interest rates like with a no credit check loan, annual fees, or the requirement of paying a deposit.
Your ultimate goal is to find an unsecured credit card without any annual or monthly fees and a credit limit of at least $300. That way, it allows you to have the flexibility for when you need money and are between paydays, as you can put gasoline or groceries on the card. Just remember that you should pay off the balance each month to avoid getting into debt.
Unsecured with High Fees
Of course, the ideal option is to find a card without fees and low interest rates, but with bad credit, you’re likely to have to compromise with higher interest fees, just as bad credit personal loans have a higher interest rate than regular personal loans. The good news is that if you pay off your balance each month, you won’t be charged any interest, which can help you offset the higher interest rates. The best thing to do is to avoid annual/monthly fees. Some credit cards also charge you a fee to pay your bill. You should avoid these cards because it costs you more to keep them.
If you get an application for a credit card that is guaranteed for approval, it is likely a secured card. These cards require you to put a security deposit down. In most cases, the security deposit is the credit limit. Therefore, if you want a credit limit of $300, you must pay the credit card company $300. Along with with such, out of that $300 comes processing fees if there are any.
Some companies will match your deposit; if you put $300 on the card to use, they will add $300, which can boost your credit limit.
The good news with these cards is that you can get the deposit back if your account stays in good standing. These card companies usually report to the major credit bureaus, so you can use them to rebuild your credit score.
If you choose to go this route, you should look for a card that doesn’t have annual fees, matches or adds some money to the credit limit based on what you put down, and has low interest rates.
You do have the option of using a prepaid MasterCard or Visa card. You don’t acquire any interest fees, and the amount you put on the card is what you have to use. However, these cards do not report to the credit bureaus, so they won’t help you raise your credit score.
You can also use a mixture of the three options. If you’re wondering, ‘what credit card can I get with bad credit?’ the answer is many. The goal here at Bonsai Finance is to find you the one with the lowest rates, no fees, and a few perks if possible.