If you've got bad credit you can still get a credit
card. You'll just pay more, and the terms of your card deal will
be much stiffer than the average cardholder has to deal with.
But handle that deal and you can begin to rebuild
your credit and get back to better and better card deals.
Some of you don't have really bad credit, you just
don't have good credit. Some of you are just establishing credit
(maybe it's the first time ever dealing with credit), others of
you have had bad credit but are beginning to make headway into restoring
a good credit name.
credit union may offer the best deals for people with damaged
People with spotless credit reports obviously get
the best deals. In most cases 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.
Card companies look at more than just your payment
history, and balance the bad -- like late payments -- against the
good -- like a steady job and long-time residence at the same address.
So don't assume or accept the worst.
Keep in mind that card issuers are very aggressive
in their efforts to sign people up. That means there will be plenty
of competition for your dollars even if they are a little crumpled.
Begin with what you need
Don't ask for too much when you apply. It might be a case of getting
what you wish for.
If you get more than you can really 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.
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 (they can easily
find how many times you've applied when they access your credit
report), especially if your credit is already tarnished. Take it
easy! Research and find your best bet and apply.
Minor credit card
Another option: 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. If you can handle a Macy's
or a Texaco card, major card companies will be impressed.
Be aware, though, 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. Having an unreported-card account won't boost
your credit one bit.
You can ask a relative or friend to co-sign for a card if you have
trouble getting one yourself. But understand something from the
start: when their credit becomes a factor in you getting a card
(it may be a huge help if it's great credit) they are also in credit
trouble in most cases if you mess up. So in this case it's not a
matter of numbers only -- friendship and love are in the mix. Take
a lot of care!
Consider a secured credit card. Start by checking out Bankrate's
survey of the best secured
credit cards in the country.
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
Why bother? 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 (again) and your
bank may soon begin extending your credit line beyond what you have
put in. So you are on your way back to healthier credit, to a status
where you will no longer need a secured card.