How to Apply for a Credit Card with Poor Credit
Credit cards are part of everyday life. They can be used to purchase almost any item. If you want to make an online purchase, book a flight, or reserve a hotel room, you need a credit card. Your credit card is typically requested when checking in to a hotel to guarantee payment. If your credit rating is poor, it becomes harder to obtain a credit card with favorable terms. Do your research to get the best deal possible.
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Instructions
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Secured Credit Cards
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Investigate secured credit cards online. Many banks and other companies--Chase, Bank of America, U.S. Bank, People's Bank, Orchard Bank, Capital One, Wells Fargo, etc.--offer Master Card and Visa secured cards. You can go to their individual websites, the MasterCard or Visa websites, or Bankrate.com and similar websites that allow you to compare different types of cards
Understand that you will need to make a savings deposit, which may range from a few hundred to several thousand dollars, according to the Federal Trade Commission website. "Your credit line is a percentage of your deposit, typically 50 to 100 percent," the FTC states. "Usually, a bank will pay interest on your deposit."
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Avoid deceptive companies and scams. Warning signs include companies offering easy credit, companies that want you to call a 900 number (which will cost you), and self-described "credit repair" companies that are pitching credit cards, according to the FTC. Make sure you know the company you are dealing with is reputable, and that you are fully aware of all the fees involved in getting the secured card, including application and processing fees (sometimes totaling hundreds of dollars), annual fees, whether you will get a refund if you are turned down, and so on. Disreputable companies often try to hide these facts, according to the FTC. Make sure you know the full cost.
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Compare the terms offered by different reputable companies. Understand fully the fees, interest rates, credit limits and other conditions involved. Choose the card that best suits your needs. Complete the application form online, review your details, then submit your application. Once approved, send in your security deposit. Your card will be issued.
Other Options
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Apply online at the same websites for a regular credit card. Your choice will be limited, but you can still take a shot. Understand that you will have a lower credit limit, higher annual fee and higher interest rate than someone with a good credit history. Try applying for a credit card with a "low introductory rate" or, if applicable, a student credit card. Typically, you will fill out information on the website, click submit or continue and the site will display the cards for which you are eligible. Answer any questions about your credit history honestly. Once you choose a card, follow the links to apply. Agree to the terms and conditions. Once you submit your application you will either get an instant answer or you will be notified quickly via email or regular mail.
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Speak to a family member or close friend with a good credit history to see if they will co-sign your credit card application or have a second card on their own account issued in your name. In either case, they will be financially liable for your debts should you fail to pay for any reason. Don't put them in that situation. Remember, this is a chance to improve your credit rating. Use the card wisely.
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Apply for a debit card from a bank or credit card company. This will allow you to charge expenses against the amount you have in your account. You won't be able to get "credit," per se, but using a debit card will help you to improve your credit rating.
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Tips & Warnings
Obtain a free copy of your annual credit report from AnnualCreditReport.com, the only free site authorized by the three major credit rating companies. This will not only arm you with knowledge, but it will also help you spot any inaccuracies in the information and let you see areas that could be improved. Check the Federal Trade Commission website for other ways to build your credit rating.
If you are declined for credit, wait several months before trying again. Multiple applications over a short period will make your credit history worse.
References
Resources
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