The challenges we face in our financial lives always seem to overwhelm us at the worst time. Emergencies pop up and we miss payments or get behind. You may have even filed for bankruptcy at some point. Just because you have bad credit doesn't mean that is the end of your ability to get a credit card.
There are many ways we can help you get back in the credit building process. Each of these tips will start you back on the road to good credit and give you the extra spending power you may need. Don't let bad credit get you down. Let's start rebuilding.
High Interest Cards
If you've missed some payments in the past, but haven't had a major default (repossession, bankruptcy, or closed accounts due to non payment), you should be able to apply for high interest cards. These cards have a higher than average interest rate because the credit card company sees you as a higher risk.
Just because you get a high interest card doesn't mean you are stuck with it either. Use this opportunity with a fresh new card to build your credit score with responsible spending and on time payments. After 6 months to a year, you may be able to negotiate that rate down to something much more manageable.
Secured Credit Cards
Let's say you have had a major default on your credit. Some examples of this are a car repossession, bankruptcy, or accounts closed due to nonpayment. Even if you get into this situation, there are still ways to get a credit card.
Secured credit cards are credit cards that require an upfront amount, usually the total credit limit, that "secures" the credit card if you should not pay the balance. The credit card company views this as a very low risk offer to you. A good example of this type of card, is that they require you to pay $250 at the time of issuance, which affords you a $250 balance that you can spend.
Just like with high interest cards, you aren't going to be stuck with a secured card forever. This is another opportunity to prove that you can make payments on time, everytime. After re-establishing a history with this new credit card company they may turn your secured card into an unsecured one.
- Deposit Amount$200
- Regular APR19.39% (Variable)
- Annual Fee$35
- Great for building credit
- Reports to all three major credit bureaus every month
- No credit check needed to apply
- Set your credit limit between $200 and $3,000
- Refundable deposit
Start the Process of Rebuilding
Our past two tips involved finding new credit cards to apply for. This tip involves repairing the credit card situation you are in now. Credit card companies always want to work with you to make your situation a mutually beneficial one.
Go through your bills and find the cards that have not been closed due to non payment. Once identified, you will need to make a determined effort to get these cards caught back up. Just because you missed a few payments, does not mean you should give up.
After you catch these cards back up into good standing, you now have an opportunity to show that you can accept a new credit card. The credit card companies are looking for a good history, but it doesn't have to be perfect, just make sure all of your accounts are current.
Don't Give Up
Don't let bad credit credit scare you into giving up. It feels like there is a lot of weight on you when you get behind, but you can recover and get new credit cards.You can succeed in making a credit history you can be proud of.
Credit cards can be very beneficial in creating a great credit report, so make sure you use credit wisely. Start with a high rate or secured card to start the journey of rebuilding your bad credit report. Every journey starts with a single step, and you can take that step now.