People with no credit history or a bad credit rating can still find credit cards they can be approved for.
If you have bad credit caused by over use of credit accounts in the past it would be best to identify where the problem was before beginning to build credit once again.
Bad credit doesn’t make you ineligible to get a credit card but it does limit what lenders are willing to approve your application for credit.
There is nothing to be gained by going online and looking for the lowest interest rate cards or sorting through the rewards offered on some credit accounts if you know you have black marks on your credit file.
Credit cards with outstanding terms and low interest are awarded to people with good payment records. If you apply for several of those cards you will not only be declined but the applications will further damage your credit.
Someone who applies for many different credit cards appears to be someone desperately looking for money. If those applications show as declined, it further labels you as a bad risk for credit.
However, there are lenders who are willing to take a chance on consumers but they balance the risk by charging higher interest rates and by issuing cards with lower credit lines. Here are the 3 types of credit cards that you can sign up for:
The Store Credit Cards
One of the easiest credit accounts to apply for is through a department store. Major store chains offer their own branded credit cards. These are provided and managed by major credit lenders but these store cards are often much easier to qualify for.
One reason is the lower credit lines associated with branded merchant cards. It’s possible to acquire store credit cards after bankruptcy or if you have no credit. If you have a significant level of black marks in your credit history, store cards may not be an option.
The Secured Credit Cards
Secured credit cards are another option for people with bad credit or no credit. The card usually carries a well known logo such as Visa or MasterCard and is used in the same way as any other credit card.
The difference in a secured credit account is that you deposit money before getting the credit card. Your credit limit for the account is the amount of money you deposited.
Some banks will issue secured cards based on your savings account. If you have used the same bank for some time, this should be the first avenue you explore for getting a secured credit card.
The bank will place the money in an interest bearing account. This guarantees the money to repay the account is there should you not pay the monthly bills as agreed.
The Prepaid Credit Cards
One very simple option for obtaining a credit card to use is to purchase a prepaid card. These cards are available at major retailers and are purchased by paying the amount you want as the credit limit.
The card itself has a small fee of perhaps $8 to originally purchase it and is a temporary card bought off the rack. You can go online to activate your new account and within a week or so you will receive a permanent credit card.
This card can be used just as a standard credit account up to the amount placed on the card. There are monthly carrying fees that are often only $3-5 each month and a small fee when you add more funds to the card.
Adding funds can be as simple as going through the checkout line at Wal-Mart and presenting the cash and the card to the cashier.
The prepaid cards are often used by people who need to stick to a budget for food or entertainment and are excellent when used for online purchases as identity theft and credit card fraud are not associated with these accounts.
Conclusion
Of the three easiest credit cards you can quality for, only department store cards rely on credit bureau reports for decisions. A secured card may be obtained even with bad credit and after a year or so of timely payments it may be possible to have the account converted to a standard credit card.
A good secured card will be reported regularly to credit bureaus and can help repair bad credit or establish a new credit history. Prepaid cards are the easiest to obtain but will not help your credit as the lenders do not report to credit bureaus.
