Regardless of whether you have bad credit or not, getting a credit card is still possible. A person with poor credit may apply for a secured card and be approved. Secured cards involve using collateral as a basis for non-payment. This option should be used with extreme care.
What can be used for collateral?
A person who has bad credit can use his or her home as a guarantee. Based on the value of the home, a card may be issued. If you default on the payment terms the bank issuing the card has the right to take the home used for collateral.
Some financial companies charge an annual fee and higher interest rates to those who have bad credit. Variable rate cards are also available. Many disclosures must be submitted to qualify for this type of credit. The interest rate will vary on this as the market fluctuates but this may get you “in the door”.
What are other options to find a credit card with bad credit?
Using the internet to find and compare the fees issued to people with poor credit. There are many sites available to financial institutions willing to work with low FICO score individuals. With this option, applications can be submitted online.
A debit card is also a good choice. When using a card of this nature, the funds are taken out directly from your bank account with no interest accumulated. The card must have a Mastercard or Visa logo imprinted on it.
Unsecured credit cards are also available but will be difficult to be approved for as the bank has no encouragement to issue a card to a high risk individual. If approval is received for this type, the interest rates will be extremely high.
Secured credit cards are given to those who have credit but bad experience or to persons who have no credit. The credit line is usually low with both types.
Improving bad credit rating to obtain a credit card
Obtaining a copy of your credit report is an important step in getting a credit card with bad credit. Occasionally items that should not be on the report will be found and removed. Also if any suspicious activity is seen on a credit report it may be disputed and removed by contacting the appropriate authorities and the lending institution. The removal of items will also increase the credit rating leading to higher chances of being approved by financial lending institution for a card.
More methods are also available but always take caution when apply for and selecting a provider to prevent fees from being taken out of your bank account.
