So you find yourself in a bad credit situation and it seems like there’s no way out. You’re ready to start addressing the problem, but no one will give you a chance. There are numerous steps you can take to repair your credit, but eventually you’ll need a credit card to help rebuild your credit score and get back on track.
Although most companies cater to people with good to excellent credit, many credit card issuers have offers designed specifically for people with poor credit histories. If you have bad credit, or no credit at all, consider these options:
1.) Secured Credit Cards
Secured credit cards are available to almost anyone, regardless of credit history. That’s because the credit line is guaranteed – or secured by a security deposit which can be anywhere from $250 to $5000. For example, if you deposit $300 on a secured credit card, you’ll receive a credit line of $300.
It may not seem like a true line of credit, but the charges you make with a secured credit card will be reported to the 3 major credit bureaus, and timely payments will show a positive track record on your credit report. Eventually, with regular on-time payments, you’ll be able to improve your credit score and move on to a better credit card with no security deposit and lower fees.
2.) Standard Credit Cards
An unsecured credit card is a ‘standard’ offer that does not require a security deposit – it’s terms are based solely upon your credit history. Although most unsecured credit cards are out of reach for people with poor credit, some credit card issuers have offers designed specifically for people in bad credit situations. Normally, these offers have lower credit limits, higher interest rates and additional fees when compared to standard unsecured credit cards.
3.) Prepaid Debit Cards
Prepaid debit cards operate just like a prepaid phone card – on a pay-as-you-go basis. They can be used anywhere major credit cards are accepted and offer many benefits, including: safety and convenience, fraud protection, no bills or interest charges, ease of use and ability to control spending.
But be aware, most prepaid cards do not report your activity to the major credit bureaus. While you can benefit from the safety and convenience of carrying plastic, your credit score may not be affected if the company doesn’t report your card activity. Be sure to look over the terms and conditions carefully.
See a complete list of credit cards for people with bad credit >