This is determined by the way you have used your credit card over time, even in years
What is bad credit?
A bad FICO credit score is usually below 580. This is determined by the way you have used your credit card over time, even in years. In a situation where you failed to make payment at any time or you probably do not have too much information in your file, then your credit will definitely not be great.
There are two important and major elements of your FICO result which are “Making payments on time” (This makes up 35% of your score) and how much you owe compared to the amount of credit you have at your disposal (This makes up 30% of your score). This means that if you make payments too late, it will automatically result in you getting poor credit. On the other hand, if have a high balance on your credit cards, then you excess log on credit giving you also poor credit.
To get a good a credit excellent rating which must be over 700 which is achieved over time, you have to keep these two points above in mind.
Do you have Bad Credit But Need a Credit Card?
We have covered on this post credit cards with the best offers that can help you rebuild your credit and improve your score significantly. Always ensure you make payments on time and also maintain a low balance when compared with your credit limit. When you do this, you will notice your credit score improving almost immediately.
Over time it has been discovered that the best option of credit cards for bad credit are the secured cards. These cards require you the applicant to provide a security deposit that protects the card issuer in the case you do not pay. You get your deposit back when you upgrade your account or close your account. To get approval for the card, you have to provide your income details, and bankruptcy or other serious problems with the credit report.
The credit limit you receive will be directly equal to the security deposit you have made. Because your security deposit is done to assumes some of the risks, you’re more likely to be approved for.
Other recommended options are unsecured credit cards that do not require you to make a security deposit but usually come with high fees, which over time can be more than the deposit needed on a secured card.
Store Credit card is another option that is easy to obtain with bad credits. The shortcomings are that they usually have low credit limits and high-interest rates.
The Best Credit Cards for Bad Credits
Getting one of these credit cards to help you create your credit from scratch again, correct any credit errors made in the past and create a clearer financial future for you and your family. Realize that there are many credit cards for bad credit available today. But ensure to get the credit cards with low fees. Offers you pre-qualification and reports to all three credit bureaus.
How to Use a Bad Credit Card in your Favor
- Making payments on time each month,
- Maintain a low credit card balance and
- Monitor your credit for positive changes.
- Choose one of the secured or unsecured credit cards on our list and
- Use it responsibly so that you can build your credit better over time.
You have to understand that with poor credit, your options for credit cards are a little limited. Because most companies are not going to give you a credit line without a deposit and most all credit cards are going to charge monthly fees. However, when you use it well, these cards can be the best route to establishing or rebuilding your credit.
Below are our Some of our Picks for Credit Card Option available for bad credit
Capital One® Secured Mastercard®
The Capital One Secured Mastercard has become one of the best credit card available in the market for building credits, it has no annual fee and also no hidden charges. when you make payments on time for 5 months consecutively, you can probably get access to a higher credit line with even no need for an additional deposit.
The card offers an initial credit limit of $200 when you pay a refundable deposit of about $49, $99 or $200 . This depends on your creditworthiness.
It also offers a variety of travel and retail benefits including no foreign transaction fees and extended warranty protection. This makes it a good option to consider if you have bad credit.
Although there are no annual fees nor foreign transaction fees on the card it has no special rewards or any sign-up bonus.
Discover it® Secured
If cashback rewards are something you want to consider then this card can be an option for you. This card has all the features that come with the signature Discover like doubling your cash back at the end of the first year.
With this card, you get 2% cashback up to $1,000 a quarter at the gas stations and restaurants, and 1% on all other spending and another 2% cashback that comes at the end of the first year of using the card.
When you make the payment on your account promptly monthly and handle your account responsibly for eight months, you could be lucky to get an upgrade to an unsecured card.
The card is widely accepted in the U.S., the Discover does not offer widespread acceptance worldwide, which can be a limitation if you intend to travel with this card. Details about the Discover it® Secured here
Total Visa® Unsecured Credit Card
This card has the convenience of being in the Visa network and can be used to build your credit because the issuer reports your credit-building habits to the 3 major credit bureaus. It’s an unsecured card, which means you don’t have to pay a refundable deposit up front.
Well, the downside with this card is that the purchase APR is quite high, plus there’s a one-time program fee of $89 and other fees that have the capacity to steal away at your savings.
Credit One Bank® Visa® Credit Card
The Credit One Bank Visa Credit Card comes with some great features, such as the ability to choose your own due date and then have access to a free Experian credit score. There are also a number of card designs to choose from, although there may be a fee.
OpenSky® Secured Visa® Credit Card
The option is great because While the OpenSky Secured Visa requires a security deposit, no credit check is necessary and no credit history is required from you. The downside is that it has a high variable APR on purchases of 19.64%, which is higher than the APR of cards with higher limits, although it’s lower than other similar cards. The fees also include an annual fee of $35. There is also a garnishment fee of $150 per incident that is a bit unusual.