What to Do When You Have Bad Credit for Credit Union Credit Cards

What to Do When You Have Bad Credit for Credit Union Credit Cards

If you havebad credit, it can be difficult to get approved for credit cards, especially from traditional banks. However, credit unions may offer options for those with less-than-perfect credit. Here's what you need to know about getting a credit union credit card with bad credit.

Understanding Credit Unions

Credit unions are nonprofit financial institutions that are owned and operated by their members. They offer many of the same services as banks, including credit cards, but often with lower fees and interest rates. Because credit unions are not-for-profit organizations, they can offer more flexible lending terms to those with bad credit.

Secured Credit Cards

One option for those with bad credit is a secured credit card. With a secured card, you'll need to put down a deposit, which will typically be equal to your credit limit. This deposit acts as collateral in case you default on your payments. Secured credit cards can be a good option for those with bad credit because they're easier to get approved for than traditional credit cards.

Credit Builder Loans

Another option at credit unions is a credit builder loan. These loans are designed to help you build credit by making regular payments. The loan is typically for a small amount, and the money is held in a savings account until the loan is paid off. As you make payments on the loan, your credit score will improve.

Co-Signer or Joint Account

If you have a friend or family member with good credit, they may be able to help you get approved for a credit union credit card. They can co-sign on the card or open a joint account with you. However, it's important to remember that if you miss payments, it will also negatively impact their credit score.

Tips for Applying for a Credit Union Credit Card

When applying for a credit union credit card with bad credit, there are a few things to keep in mind:

1. Check your credit score: Before you apply, check your credit score to see where you stand. This will give you an idea of what types of cards you may be eligible for.

2. Be prepared to explain your credit history: If you have bad credit, be prepared to explain why. Credit unions may be more willing to work with you if you can provide a valid reason for your past credit difficulties.

3. Consider a secured credit card: As mentioned earlier,secured credit cardscan be a good option for those with bad credit.

4. Don't apply for too many cards at once: Applying for multiple cards at once can negatively impact your credit score.

Credit Card Pro Tips

Once you've been approved for a credit union credit card, there are a few things you can do to make the most of it:

1. Pay your bill on time: This is the most important thing you can do to improve your credit score.

2. Keep your balance low: Try to keep your balance below 30% of your credit limit.

3. Avoid cash advances: Cash advances usually come with high fees and interest rates.

4. Take advantage of rewards: Somecredit union credit cardsoffer rewards or cash back. Make sure you're taking advantage of these benefits.

5. Read the fine print: Make sure you understand the terms and conditions of your credit card, including any fees or penalties.

In conclusion, credit unions can be a good option for those with bad credit who are looking for a credit card. Consider a secured credit card or credit builder loan, and be prepared to explain your credit history. Once you've been approved for a card, make sure to pay your bill on time, keep your balance low, and take advantage of any rewards.