How to Get a Credit Card with Bad Credit

If misusing credit cards is what caused your credit rating to sink in the first place, then perhaps it would be wise to steer clear of credit cards for the time being. However, there are several very good reasons to have a credit card. Although it is possible to get a credit card with bad credit, the interest rate and other terms of the card are going to be much higher than that of someone with good credit. Getting a credit card with bad credit can be difficult, but it is possible.


Before applying for a credit card, request a copy of your credit report from one or more of the three major credit reporting agencies (Experian, Trans Union and Equifax). You can then identity inaccurate information that can be corrected to improve your credit score. Avoid applying for multiple credit cards at one time. Credit card issuers will pull a copy of the consumer's credit report when receiving an application. Multiple inquiries by different companies will reduce your credit score.

So, if you want to have a credit card despite your bad credit history you can explore the credit card options explained below.

Traditional Credit Card

To qualify for a traditional credit card, consumers need to have a credit score of about 600. Even at 600, consumers may have difficultly getting a card. There are a number of websites that you can use to identify credit card companies that accept applicants with low credit scores. Smaller local banks and credit unions may allow established clients with bad credit to obtain a credit card. Some store credit cards are easier to qualify for as well. Traditional credit cards usually have lower fees and lower interest rates than other types of credit cards, but those with poor credit will pay higher rates.

Secured Credit Card

There are a number of specialized credit card products that people with bad credit can get. One is a secured credit card. Secured credit cards allow you deposit anywhere from a couple hundred dollars to several thousand dollars of your own money into an interest-bearing account. A lender then issues you a card with a credit line that's equal to or slightly higher than your deposit. One thing to make sure of before getting a secured card is that the issuer reports to a credit bureau since your main reason for getting a secured card is to re-establish credit.

Subprime Credit Cards

Subprime credit cards are another option for people with bad credit. Often referred to as fee-harvesting cards because the issuers typically charge a lot of upfront processing fees, most experts deem these to be your last resort because they are so expensive.

Cosigned Credit Card

A co-signed credit card is a credit card that has two names on the account. It is similar to using a co-signer to get a car loan. In the case of a co-signed credit card, both parties are fully responsible for any debt incurred. Typically, these cards report the account activity for both people to the credit reporting agencies. These cards are useful for a person who needs to build or rebuild credit. Interest rates and expenses for these cards are generally less than those of a secured credit card.