Even if you have bad credit, you can still get a credit card. Just be prepared to pay more and know that your card deal will be much stiffer than the average cardholder has to deal with.
In fact, according to Bankrate.com, if you can handle the terms of your card, it will help you rebuild your credit and get back to better and better card deals.
Many people don’t have really bad credit, just not GREAT credit. Some people are just establishing credit, while others have had bad credit but are beginning to make headway into restoring a good credit name.
Of course, people with spotless credit reports obviously get the best deals. If you have less than perfect credit, you will find that your rates, fees, penalties, charges and credit limits (you may have to start with something as low as $500) will be worse in relation to how far from perfect your credit record is, Bankrate.com says.
They also say card companies look at more than just your payment history, and balance the bad (late payments) against the good (steady job, long time residence at same address, etc.). Don’t assume or accept the worse, they warn.
Bankrate.com says to keep in mind that card issuers are very aggressive in their efforts to sign people up, meaning there will be plenty of competition for your business. They offer the following advice when shopping for credit cards:
Begin with what you need - Don’t ask for too much when you apply. If you get more than you can handle, you could be putting you entire credit recovery at risk. If you can afford more, put that extra money toward getting rid of other debt, including old credit card bills. A reformed credit history is more valuable than a big credit line.
Keep paying off non-credit-card bills -There’s little point in paying off your new credit card if you fail to pay a mortgage, utility bill or car payment.
Don’t apply to every card company you can find - Too many applications for credit can scare creditors, especially if your credit is already tarnished. The best thing to do is research, find your best bets, and then apply.
Try applying for a minor credit card - Try a department store, a gas company or some other smaller credit card. It will help you in your daily finances, and it will also help rebuild that credit. Bankrate.com warns that these cards sometimes come with high interest rates and low credit limits. Plus, some issuers of department store cards do not report to the credit bureaus. This means any on-time payments you make with the card won’t be noted on your credit report.
Co-signatory - You can ask a relative or friend to co-sign for a card if you have trouble getting one yourself. Just know that their credit will become a factor in you getting a card, which means they are also in credit trouble in most cases if you mess up.
Secured card - Consider a secured credit card. With a secured card you put up your own money (into a savings account) and that amount (or part of it) is the credit line for your card. Put in $1000 and you could have up to a $1000 credit line.
Why bother? Bankrate.com says it gives you the flexibility of using a credit card and because if you pay off every statement you are letting creditors know that you can handle credit.