How to Get Unsecured Credit Cards with Bad Credit

How to Get Unsecured Credit Cards with Bad Credit

Havingbad creditcan make it difficult to obtain a credit card, especially an unsecured one. However, there are still options available for those with bad credit to obtain an unsecured credit card. In this article, we will discuss several ways for individuals with bad credit to obtain an unsecured credit card.

1. Apply for a Secured Credit Card

One option for those with bad credit is to apply for a secured credit card. A secured credit card requires a security deposit, usually equal to the credit limit of the card. This deposit acts as collateral and reduces the risk for the credit card issuer. By using a secured credit card and making timely payments, individuals can rebuild their credit and eventually qualify for an unsecured credit card.

2. Apply for a Store Credit Card

Another option for individuals with bad credit is to apply for astore credit card. Store credit cards are typically easier to obtain than traditional credit cards and often have lower credit requirements. However, store credit cards may have higher interest rates and limited usability, as they can only be used at specific stores.

3. Apply for a Credit Builder Loan

Acredit builder loanis a loan that is specifically designed to help individuals build or rebuild their credit. These loans are offered by some banks and credit unions and require the borrower to make monthly payments. The payments are reported to the credit bureaus and can help improve the borrower's credit score. Once the loan is paid off, the borrower may be eligible for an unsecured credit card.

4. Become an Authorized User

Individuals with bad credit may also consider becoming an authorized user on someone else's credit card. This allows the individual to use the credit card and build credit without being responsible for the payments. However, it is important to note that if the primary cardholder misses payments or carries a high balance, it could negatively affect the authorized user's credit score.

Tips for Applying for and Using Unsecured Credit Cards

When applying for an unsecured credit card, it is important to choose a card with manageable fees and interest rates. Some credit cards may also offer rewards programs, such as cash back or travel rewards. However, it is important to avoid overspending and carrying a high balance, as this can negatively affect credit scores and lead to high interest charges.

Additionally, it is important to make timely payments and keep credit utilization low. Credit utilization is the amount of credit used compared to the total credit available and should be kept below 30% to maintain good credit. Late payments can also negatively affect credit scores and lead to late fees and increased interest rates.

Conclusion

Although it can be challenging for individuals with bad credit to obtain an unsecured credit card, there are still options available. By applying for a secured credit card, store credit card, credit builder loan, or becoming an authorized user, individuals can build or rebuild their credit and eventually qualify for an unsecured credit card. It is important to choose a card with manageable fees and interest rates, avoid overspending, make timely payments, and keep credit utilization low to maintain good credit.