How to Acquire a Credit Card if You Have Bad Credit
So, you’re ready to get a credit card, but you have bad credit. That’s okay.
Although it might seem like there are no cards out there for people with bad credit, there are plenty of options.
In this post, we’ll run through the best credit cards for people with bad credit in 2022 — and how to apply.
What is Bad Credit?
Bad credit generally means you have a FICO score that falls below 580, and that’s considered poor in 2021. For example, if you’re looking for an auto loan, many dealerships won’t give you competitive interest rates on anything lower than 580.
On the other hand, excellent credit is generally considered a score of 720 or higher. Lenders will offer you great deals on everything from mortgages to car loans if you have excellent credit. And you’ll be eligible for the best rewards credit cards on the market.
Why Should I want a Credit Card if I Have Bad Credit?
There are two main reasons why people want to apply for a credit card even if they have bad or damaged credit:
- They want to rebuild their score. Credit cards can help you rebuild your score if you use them wisely — i.e., by paying off balances in full each month and not charging more than 30% of your available limit each month.
- They need the convenience of a card. Credit cards make it easy to buy online and in stores without carrying cash or writing checks, so some people with bad credit want them just for convenience.
Best Cards for People With Bad Credit
- Best Secured Credit Card: Capital One® Secured Mastercard®
- Best For No Foreign Transaction Fees: Wells Fargo Secured Card
- Best For Low Credit Score: Petal® 2 “Cash Back, No Fees” Visa® Credit Card
- Best For College Students: Discover it® Student Cash Back
- Best For $0 Annual Fee: Capital One QuicksilverOne Cash Rewards Credit Card
Secured Credit Cards
There are plenty of credit cards available to people with bad credit.
In fact, there’s an entire class of cards specifically aimed at people with bad or no credit history. These are called “secured” credit cards because the approval is secured by a cash deposit that serves as your credit limit.
Your deposit is refunded if you close the account and pay off the balance, so it’s essentially just a way to get approval while the issuer mitigates the risk of lending to someone with a non-existent or poor credit history.
How to Pick the Best Credit Card for You
People with bad credit can still get a credit card. The key is choosing the right card for your situation and using it wisely. Here’s how to pick the best credit card for you, even if you have poor credit:
- Find a card that fits your lifestyle.
- Focus on rewards.
- Learn about secured cards.
- Avoid dangerous cards with high annual fees or costly add-on services like identity theft protection.
- Know your score.
- Avoid applying for too many cards at once.
Lastly, apply only when you are most likely to get approved.
Payment industry guru Taylor Cole is a passionate payments expert who understands the complex world of Best Payment Providers. He also writes non-fiction on subjects ranging from personal finance to stocks to cryptopay. He enjoys eating pie with ice-cream on his backyard porch, as should all right-thinking people.