How to Obtain Credit Cards With Bad Credit

Full-featured bank credit cards may be available to you even if you have bad credit.

Having bad credit doesn't mean you can't get new credit. You can have a new, full-featured bank credit card within weeks after applying--even if you have low credit scores and blemishes on your credit report, such as charge-offs and accounts that have been sold to debt collectors. The catch? You may have to accept whopping interest rates and steep application fees along with other charges. Or, you may qualify for other credit cards without the high interest rates and fees. That means you have options, no matter how bad your credit is.

Instructions

1. Apply at your bank or credit union first. Don't automatically assume that you must apply only for credit cards marketed to people with poor credit. Your bank or credit union may approve you for a full-featured, unsecured credit card based on your banking history.

2. Get a cosigner. A family member or friend with excellent credit can help you get approved for a credit card by cosigning. However, the friend or family member will be responsible for the entire balance if you default. Applying at the cosigner's bank may lead to fast approval.

3. Apply for a secured credit card if you're turned down for an unsecured card or if you do not have a cosigner. Secured cards are full-featured MasterCard or Visa credit cards tied to your savings account. Money in your savings account--usually at least $200--becomes collateral for the card, making for easier approval. You don't have to have an existing savings account at the bank to apply.

4. Find cards marketed to people with poor credit. Check credit card comparison websites for banks willing to issue unsecured credit cards to people with bad credit. The upfront costs can be steep, however. In 2010, one bank was offering an unsecured MasterCard with an initial credit limit of $300--along with an application fee of $95, an annual fee of $75 and an initial interest rate of nearly 25 percent. The whopping interest rate and first-year fees remove much of the risk for the bank, making credit approval likely for a wide range of bad credit borrowers.

5. Apply for department store credit cards. Department store credit cards generally offer easier approval, and a positive payment history could help rebuild your credit and eventually lead to approval for a MasterCard or Visa.

References

• First Premier Bank: Less Than Perfect Credit
• First Premier Bank: Fees, Rates and Costs
• Credit Cards: Ways To Restablish Credit
• Equifax: Reesablish Your Credit

Resources

• Credit Cards: Cards For Bad Credit