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A Guide To Getting A Credit Card Despite A Bad Credit History

December 10, 2018 | Leave a Comment

Toothy smile woman holding showing credit card near office store shopping mall outdoors. Shopaholic concept pay with credit card

Are you one of the 68 million Americans with a bad credit score? If so, then you probably know that it can be challenging to get a credit card.

If you’ve been wondering, “Can I get a credit card with bad credit?” you’ve come to the right place.

The short answer to this question? Yes. But, you may have to jump through a few extra hoops.

Read on to learn how you can get a credit card even with a less-than-ideal credit score.

How Can I Get a Credit Card with Bad Credit?

When it comes to getting a credit card with a bad credit score, you can employ a lot of the same strategies you would use to get a personal loan with bad credit.

Some of the best approaches to take when trying to get a credit card include:

Look into Bad Credit Credit Cards

There are a few credit cards out there geared specifically toward individuals with bad credit scores.

These cards often have higher interest rates and annual fees. But, they can still be a good option for people who are looking to build up their credit score and can’t get approved for other cards.

In many cases, you can also get the annual fee on these cards waived simply by asking the lender.

Consider a Limited Use Credit Card

Another way to start building credit or improving your credit score is to apply for a limited use credit card from a retail store that you shop at frequently.

Retail stores typically have low credit limits and higher interest rates, so it’s important to keep up with your payments.

They’re still a good option for improving credit, though. And, retail stores can typically be relied upon to approve applicants with lower credit scores.

Use a Secured Credit Card

A secured credit card is a card requires you to pay a security deposit before you can use it. That security deposit is made against the credit limit.

It may not be ideal to have to pay money before you can start using a credit card. But, it’s better than nothing and still provides you with an opportunity to build credit or improve your credit score.

Remember, too, that after a year or so of on-time payments, you can convert your secured credit card to an unsecured credit card.

Avoid Subprime and Prepaid Credit Cards

Some of the credit cards geared toward people with bad credit come from reliable lenders. But, there are also credit cards are not great options for those with bad credit scores.

Subprime credit cards charge high upfront fees before you can use them. These fees take up a large portion of your credit limit.

It’s also a good idea to avoid prepaid credit cards. These cards don’t improve your credit score, so they won’t help your financial situation long-term.

Work with an Online Lender

If you’ve been turned down for a credit card from traditional banks or credit unions, you might want to consider applying for a credit card from an online lender like Bonsai Finance.

Online lenders typically are more flexible when it comes to granting loans to people with bad credit scores. They may also take other factors into account, like your employment history, income, and education level.  As part of this process you will almost certainly want to improve your credit score.

One good way to do this is buy tradelines.   Tradelines are basically lines in your credit score, but the term refers to adding yourself to someone who has very good credit.  This does work, but it usually has a monthly cost involved.

Credit Card Mistakes to Avoid

Once you are approved for a credit card, it’s important to be smart when using it. Otherwise, you’re going to rack up additional debt and continue to struggle with bad credit.

So, what does it mean to use your credit card in an intelligent way? Start by avoiding these common credit card mistakes.

Learn Your Credit Card Terms

Many people obtain credit cards and don’t realize what kind of terms they’re agreeing to. It’s important to thoroughly understand the terms of your credit card and pay special attention to the following pieces of information:

  • How the company handles late payments
  • What is the annual fee (if there is one at all)
  • Are there balance transfer fees?
  • What is the minimum payment?

Go over the terms of your card once or twice a year to make sure you’re up-to-speed.

Pay the Full Balance Each Month

Some people are under the impression that it’s good to leave a balance on their card each month. In reality, it’s best to pay off your full balance every month.

Leaving a balance on your card increases the amount of interest you pay each month. It can also negatively affect your credit score.

Pay Your Bills on Time

This seems like a no-brainer, but a lot of people have a hard time paying their credit card bill on time each month.

If you forget when the payment is due, set an alarm on your phone or set up automatic payments so that you never have to worry about making them on time.

Read Your Billing Statement

Many people throw their credit card billing statement into the trash without ever looking at it. This is a big mistake.

Read your billing statement each month so that you’re alerted to any changes to your credit card terms.

Keep Your Credit Utilization Low

Finally, remember to keep your credit utilization at or below 30 percent. For example, if you have a $1,000 credit limit, avoid charging more than $300 on your card each month.

If your credit utilization is high, you’re at a greater risk of over-the-limit fees and penalty interest rates.

Take Control of Your Finances Today

You now have a clear answer to the question, “Can I get a credit card with bad credit?”

But, remember that there’s more to managing your finances than just having a credit card. You need to make sure you’re using it appropriately and paying it off in a timely manner.

Keep the money management tips in this article in mind so you can take control of your financial situation once and for all.

Need more financial advice?

Be sure to check out the money and finances section of our site today for more tips and tricks.

Filed Under: Money and Finances Tagged With: Credit Cards, Credit Score, credit scores

Identity Thieves Love Children, So Start Building Credit Before Age 17

February 18, 2018 | Leave a Comment

Start building credit before age 17 — that’s not to say you should get your kids their own charge cards if you don’t think they’re ready. But you need to monitor their credit reports early.  [Read more…]

Filed Under: Money and Finances Tagged With: children, credit, Credit Cards, credit report, Credit Score, Identity Theft, Social Security

Pay More Attention to Your Credit Score Following Equifax Breach

September 9, 2017 | 1 Comment

Credit Score ComponentsCredit scores have gotten more attention this week thanks to the news of a data breach at Equifax potentially impacting about 44% of the U.S. population. To rein in the damage from this incident, Equifax is offering a free notification service that is essentially a complimentary credit monitoring tool.

[Read more…]

Filed Under: Credit Scores Tagged With: Credit Cards, Credit Score, Equifax, Insurance, Interest Rates

Money Saving Tips for Christmas Shopping

December 5, 2010 | 1 Comment

save money when buying Christmas presents

Image from Christmasstockimages.com

Christmas is a time for giving and sharing and expressing love and gratitude and being with family. Yes, it is. But all this love and sharing can also lead to a lot of over-spending. According to CBS moneywatch.com:

According to this year’s National Retail Federation holiday survey, the average American will spend close to $700 this season on gifts, cards, decorations, and the like.

If I convert this to my currency (Philippine Peso), that equates to around 30k PHP. WOW! That is a big, big, big amount to spend to feel the Christmas spirit. Now, I love Christmas and I am all for the gift-giving and the shopping. I love all the Christmas decor that comes up for the season. I love the window displays and the twinkling lights and all the multi-colored trees. But I make a conscious effort not to spend too much on Christmas, regardless of whether I have 30k or not. Here are some money saving tips that work. I know this because I’ve tried them.

1. Planning is the root of all saving.

Yes, I am a firm believer in planning. Ask anyone who knows me relatively well and they will tell you that I have a list for everything, I worship MS Excel, and my organizer is a perenial brick in my bag. I’ve found though that listing down the poeple you want to give gifts to, the gift you want to give (if you know this already), and your budget, all work to set your expectations and to keep to workable numbers.

2. Stick to the Plan.

Ok, you didn’t just go through all that effort of listing people and thnking about who would be on the list this year given your budget and who would just get some warm wishes on a pretty card, only to not follow it. As hard as it may appear, and as tough it may be to fight off the urge to get that perfect thing for your friend whom you haven’t seen or talked to in almost a year, RESIST!

3. Start Early.

In Manila, folks start Christmas shopping as early as September and October. I can see the collective eyebrows rising. There is a practical reason behind this over-exuberance. Items almost always become more expensive from November to the end of the year. This is true for most stores. We do have sales but these sales are often for items that aren’t as nice or as good or as up-to-date as others. You have to start shopping early on the first day of a sale in a shop to get the good stuff with slashed prices. Otherwise, you will be competing with a crush of people for so-so items. Usually, things that are non-perishable and aren’t dependent on size (like books, appliances, etc.) are still priced low or normal compared to Christmas prizes. You can also find a lot of variety in the months before the Holiday season. We aren’t limited by season so a lot of items are applicable all year round. You can also find a lot of bargain items in the bazaars that start springing up end of September onwards. These bazaars are different from stores in that they have often homemade items, rare items, unbranded but really good stuff and they compete with brand stores in price and try to beat them by offering good stuff at even lower prices, earlier. Shopping early can mean you are done with this way before the Christmas crush, still have a lot to choose from and not just the left-overs after the buying posse, and get items at normal or low prices.

4. Use discounts and gift cheques.

Discounts from stores you frequent or vendors you regulary go to, and using gift checques you’ve been given is one way to cut expenses. You aren’t actually spending at least the full amount here.

5. Do NOT use your Credit Card.

It may seem odd. It may be throwing a major kink in your Christmas budget plans. But using your Credit Card for shopping might just be the way to put you in debt for the next 12 months. I did this for one gift last year. I bought my son a big boy bike. I got in on installment, 6 months to pay. My goodness. I was still paying it off even after I had to get its flat wheel and busted breaks fixed. Never again.

6. Go for the Envelope Approach instead.

What is this? Well, it is simply putting your budget, in cash, in an envelope, ready for the days of shopping. You can allocate certain amounts for certain people as well. I like separating amount by indicating the person in colorful post-its and then separating by using paper clips. This way, you prepare your budget for the people you want to give gifts to this year; you aren’t in danger of over-spending on one person and not having enough for the rest; you do not go into credit debt.

7. Go Wholesale and/or Homemade.

If you have people in your list you feel have to be there, like groups of officemates, or your boss, doctor, dentist, etc. try going for wholesale products. What I do is I get 1 item for all my female officemates, like a pretty notebook, and 1 item for all my male officemates, like a nice money clip. This way you aren’t stressed out about having to think of forty unique, small gifts; you won’t be stressed over offending someone by maybe giving something “nicer” to someone else; you can get small stuff cheaper if you buy by bulk. Ok, maybe you can make an exception for your boss here.

On that note, what person wouldn’t like receiving something unique and from the heart? Seriously. So, instead of giving your boss a uniform gift, why not bake him a cake or your speciality pastry? Or you can give him something he can use like a hommade desk organizer. These are things that will cost you less than store-bought gifts because the individual ingredients or parts required cost a lot less put together. Plus, if it’s simple enough, not dangerous at all, and relatively fun to do, you can get your kids in on the action!

8. Finally, Be Prudent. If you really can’t afford a Santa sack this year, forego it. They will understand. Trust me.

Hey, times are hard for everyone. Sometimes, there are pressing matters that just require more attention and more of your resources. I’ve had a Christmas where I gave all my family and friends a nice photo calendar of myself and the kids with some warm holiday greetings instead of gifts becuase I just needed to allocate a Christmas budget for something else. I try to make sure my kids and god kids always have gifts, even small ones but I know the adults will understand.

So, I hope you all have fun and reasonable shopping trips over the next few days!

Cheers,

Vicki

Filed Under: Holidays, Money and Finances, Shopping Tagged With: Christmas, Christmas Shopping, Credit Cards, Discounts, Envelope Method, Gift Cards, Homemade, Planning, Prudence, Start Early, Wholesale

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