Finding credit cards for bad credit and credit cards for fair credit is a challenge that many people face when they are trying to build or rebuild their credit. For anyone who finds themselves in a situation where they need to improve their credit score getting a credit card is a great first step. The problem is that if your credit isn’t in the best shape it can be very challenging finding a credit card that will work for you. The issue here is simple, most credit card companies require a good credit score to issue you a card, but if you can’t get a card in the first place you won’t be able to improve your credit score. The good news is that there are options out there that can work for you. If you have bad or fair credit you need to understand that the interest rates on any cards you get will likely be higher than the offers that are given to people with good credit. You should also remember that the perks and rewards may not be as good as you were hoping for.
While you may not be thrilled with the interest rate and other factors on the card you are getting, keep in mind that to credit card companies you represent a more significant risk than a consumer with good or great credit. Because of this credit card companies will charge you a higher interest rate. The good news is that you can work around this higher interest rate. By paying off your balance before the end of each billing cycle you can avoid paying any interest on your purchases. Plus those payments that you make get reported to credit reporting agencies, which will help you to improve your score. In time your score should climb enough that you will be able to apply for better credit cards with more favorable terms.
So What is the Best Credit Card for Bad Credit
With so many choices of credit cards for bad credit and credit cards for fair credit it can seem impossible to narrow your choices down and pick the right one. What you need to remember is that not all credit cards are created equally. There are big differences in rewards that they offer as well as differences in the APR that they charge. What you need to do is to look at the different options and then make an educated decision about which card you are most likely to be approved for, and which one best suits you. If at all possible you should try to get an unsecured credit card since they normally have better rewards, and of course the lack of a security deposit is always a plus. You should also be careful when you apply for various credit cards. Hard credit inquiries have a negative impact on your credit, so you should limit how many of them you allow. Many credit card companies have a pre-approval form you can fill out that will give you an idea as to your likelihood of being approved. If you are pre-approved then you can feel fairly confident that the hard inquiry necessary for a final approval will be worth it.
A Secured Credit Card Is What Exactly?
Secured credit cards are a type of credit card that you get that necessitates a security deposit on the card. This security deposit is in place to ensure that if you can’t pay your bill the credit card company will still be able to recover the money they are owed. The main disadvantages of this type of card are that you have give the credit card company a deposit, and also that your credit limit will be low, generally just below the amount of money you put down as a deposit. The good news is that this type of card does report payments to credit reporting agencies so having it will improve your credit score as long as you are making payments on time. The other good news about this type of card is that as your credit score improves you will be able to qualify for more favorable credit cards. You may even be able to keep your secured card and get your deposit back, making it an unsecured credit card. Another good reason to get this type of card is that there are many secured credit cards that offer point based reward programs, so you can use this to add a little more cash to your pocket. While secured credit cards may not be your first choice, it may be one of the few credit cards for bad credit that you will qualify for.
The Best Options For Secured Credit Cards
The Discover It Card issued by Discover is one of the best options available for people that cannot qualify for an unsecured card. Discover is a name that is well known in the credit card industry and they have a reputation for offering great perks and rewards with their line of cards. Once you are approved by Discover It you will have to give them a minimum deposit of $200, the minimum deposit will also establish your credit limit with them. Once you start using your card you can earn 2% cash back at restaurants with a limit of $1,000 per quarter. This means that if you can use your card responsibly you can earn up to $4,000 a year in rewards from Discover It. On top of that Discover It automatically matches all of the cash back you have earned during your first year if you are a new cardholder. This means that you can potentially earn up to $8,000 in a year just by using your Discover It card. While the Discover It Card has many benefits, you should still be looking for a way to transition to an unsecured card with a higher credit limit. The good news here is that Discover It not only reports to the major credit bureaus, they also review your account after 12 months to see if you can get your deposit back and qualify for an unsecured card instead.
Another great option when looking at credit cards for bad credit is the Capital One Secured Mastercard. One of the reasons that this is such a popular card is that you can put down a sizable security deposit, up to $3,000, and then this will be your credit limit. Most secured credit cards have a relatively low credit limit, but with Capital One you can enjoy a much higher one. Another big advantage of the Capital One Secured Mastercard is that they actually consider extending you credit that exceeds your security deposit if you show responsible spending habits. Like other credit cards the Capital One Secured Mastercard also reports payments to all the major credit bureaus, so using it responsibly can help you to build a better credit score.
The last of the secured credit cards that you should take a look at is the Secured Visa From Merrick Bank. One of the biggest perks of this card is that they automatically consider you for credit increases without requiring an additional deposit. If you use your card responsibly and keep making payments on or before the due date there’s a good chance that they will increase your credit limit. Much like Capital One, the Secured Visa From Merrick Bank also accepts up to $3,000 for a security deposit, which can give you a higher credit limit. If you are looking to rebuild or build your credit, then the Secured Visa From Merrick Bank should be a card that you consider getting.
Unsecured Credit Cards For People with Fair Credit
If you are trying to improve your credit score and already have what is considered to be fair credit, then there are a lot more options available to you than if you had poor credit. Since you have a credit score that is higher than the scores of people with bad credit you are considered less of a risk, and as a result you should qualify for an unsecured credit card that has a rewards program that you can take advantage of. While you won’t get a card with an APR and rewards system that is as good as those with good or great credit, there are still quite a few options that can be very financially beneficial to you. By taking the time to explore your options you can find a card that will work for you.
The CreditOne Bank Platinum Visa is one of the best choices for people with fair credit because of it’s easy application process, cash rewards program, and flexible payment schedule. CreditOne Bank also has an easy application process that can get you pre-approved before you submit to having a hard inquiry done. They report to all of the major credit bureaus as well, so if you are keeping up with your payments you will see your credit score start to climb. Like most credit cards for people with fair credit the CreditOne Platinum Card does charge a high interest rate. However, by paying off your balance before the end of each billing period you can avoid paying any interest, which makes this a non issue.
Another popular option for people with bad or fair credit is the Milestone Gold Mastercard. One of the reasons that this is such a popular card is that they don’t automatically disqualify you because of a previous bankruptcy. A bankruptcy is a sign that at one point your finances got out of control forcing you to basically had to give up and discharge your debt. This is a major red flag that will scare many credit card companies away. The good news is that the Milestone Gold Mastercard is a card that you can still qualify for even if you have had to file bankruptcy in the past. On top of that they offer an easy pre-qualification without an impact to your credit score, and they also report to all of the major credit bureaus.
One credit card for fair credit that you should definitely strongly consider is the Capital One Quicksilver Card. What makes the Quicksilver Card such a good value is that it offers 1.5% cash back on every purchase. While a lot of credit cards offered to people with good credit have this type of rewards program, it’s much harder to find in a card that accepts people with less than stellar credit. On top of offering 1.5% cash back they also offer automatic credit line increases after you have had the card for 6 months and kept up on your payments. The Capital One Quicksilver Card can be a powerful tool in your wallet as you work to build a stronger credit score and a better financial future.
Another great credit card you should look at is the Barclay Rewards Mastercard. While the rewards system isn’t quite as good as the one offered by Capital One Quicksilver, it is still quite impressive for a card that approves people with poor or fair credit. With the Barclay Rewards Mastercard you earn points on your purchases, and you can also earn double points on gas and grocery purchases, excluding Target and Walmart. When you are building or rebuilding your credit any time you can get a credit card that has a good rewards program you should jump at it.
The last unsecured credit card that you really should invest time in learning about is the Indigo Platinum Mastercard. Like many other credit cards the Indigo Platinum also offers a pre-qualification without using a hard credit inquiry. They also report to all major credit bureaus, and when you keep up on your payments they consider giving you a credit line increase. If you are concerned about identity theft or other security issues the Indigo Card also offers zero liability fraud protection. This is important because the last thing you want when you are trying to build your credit is to have fraudulent activity derail your efforts.
Make Sure That You Make Smart Choices As You Continue To Work On Improving Your Credit Score
Navigating the waters of building or rebuilding your credit can seem dangerous and confusing. What kind of card should you get? Should you carry a balance? Are rewards points really worth the effort? Are secured cards worth it? These are all valid questions that you need to consider and learn the answers to before you make any decisions. Always remember that the reason you have bad credit now is probably do to mismanagement of your finances when you were a bit younger. You probably overextended yourself and ended up with too much debt and not enough income. You shouldn’t feel embarrassed by this, it’s a fairly common mistake that many people make. What you should do is learn from this mistake so that in the future you can prevent it from happening again. Rebuilding your credit can take years of hard work, and a single misstep can set you back a lot. So you need to make learning about credit cards and your credit rating a priority, and you need to start today.
Step one on the path to a better financial future is to get a credit card, and to use that credit card responsibly. If you can’t qualify for an unsecured card, then you are just going to have give them a deposit and get a secured card. Having a credit card, keeping your balance down, and keeping up on your payments will have a positive impact on your credit. It won’t happen overnight but is you are consistent in being on time with your payments and on keeping your balance down you can have a positive impact on your credit. You should also remember that any of the cards you are getting and using while you have poor to fair credit should be a temporary fixture in your wallet. While you certainly don’t want to close accounts because it hurts your credit score, you can simply keep the cards and not use them. Your goal should be to reach the point you are able to qualify for better credit cards that offer better interest rates as well as a more lucrative rewards program.
One thing that many people underestimate is the value that a good rewards program can have to you. A lot of people don’t really pay attention to how rewards programs work, and because of that they are missing out on something that can put more money in their pocket. When you are looking at credit cards for bad credit and credit cards for fair credit, you should jump at any opportunity that has a rewards program. For example if you can get the Capital One Quicksilver Card then you can earn 1.5% cash back on every purchase. You can take advantage of this by paying a utility bill or covering another large expense, then immediately paying the card back. While that 1.5% back may not seem like a lot, it can quickly add up. In simplest terms it’s basically giving you a 1.5% discount on everything you use your card for. If you have to spend your money anyway there really isn’t a good reason for not taking advantage of cash back offers that will put more money back in your pocket.
No matter what the reasons are for your credit issues the most important thing you can do is to keep a positive attitude and work hard to change your spending and savings habits. The financial world revolves around credit, and if you can build good credit there will be many more doors that will open up for you. Is working to improve your credit hard work? It absolutely is, but it’s work that is necessary. When you have bad credit you pay higher interest rates, have to put more money down when you make major purchases, and generally have a harder time dealing with any type of financial issues. Life is much better and easier for people who take care of their credit and are financially responsible. While you are working to improve your credit you need to keep this in mind so that you can keep working on your issues and get the financial security that you want and need.
Since you are working to improve your credit one of the most important things you can do is stay on top of your credit report. There are many resources out there that will allow you to monitor your credit on a regular basis. Many of these resources are either free or very low cost. Monitoring your credit enables you to make sure that the decisions you are making regarding your finances is having a positive effect credit. Monitoring your credit also enables you to watch out for potential fraudulent activity that can have a negative impact on your credit.
Final Thoughts on Turning Bad Credit to Good
To recap there are several important things you need to be doing on a regular basis if you want to improve your credit score. First, make sure that you have a budget in place that enables you to track your income and expenses. Make sure that the budget you are on allows you to cover your expenses. If you have more expenses than income then it’s time to either find another source of income, or it’s time to cut down on your spending habits. Next get a credit card, preferably unsecured, but if necessary secured. Then use your card responsibly, keep your balance below 30%, and keep up on your payments. It doesn’t take a genius to build a great credit profile. Instead all it takes is someone who is capable of managing their money the right way and making intelligent financial decisions. If you currently have poor credit then at some point sooner or later you are going to feel how difficult this can make your life when you need to apply for some type of credit or financing. Nobody is born with great credit, it’s something they earn over time. If you are willing to put in the effort and use credit responsibly then you will be able to enjoy the rewards of having great credit.