Getting a Credit Card with Poor Credit Score
A credit card allows the borrower the ability to purchase goods or services using the amount provided by the credit card company. Typically, the borrower is supposed to return the amount used along with interest rate at the end of the month. Each credit card has a limit to which the borrower can spend.
The credit card allows you to purchase a good or service and not pay for it until a few weeks. The payment will be due at the time of the bill payment.
If you ever find a defective product in a store that does not give refunds, your credit card will provide a refund.
If your credit card is stolen or misplaced, you can inform the credit card company. They will immediately close the account and open a new one.
- Easy to Track
You can use the credit card history to track down all the purchases you have made. This can be helpful in creating a budget or preparing for tax.
- Compound Interest
Delaying payment indefinitely can increase the interest rate so high that it is impossible to repay.
- Spending More
Psychologically, you tend to purchase more with a credit card as compared to cash.
- Late Fee
The borrower is often charged a late fee for being unable to pay on time. Not only is dealing with a late fee a hassle, it can also significantly decrease your credit score.
- Credit Score
Though having multiple credit cards could improve your credit score, if you are using more than 20% and diligently paying the credit card company, your credit score will drop.
Getting a Credit Card
After the background on credit card, let us see how you can get one. The most important factor that is considered before receiving the credit card is your credit score.
Since there are a large number of credit cards, you should compare them with each other and select the ideal credit card which suits you the best. Additionally, you have the interest-free period, so you can make the most out of that situation. Remember to spend as much as you can pay by the end of the month. Amidst the numerous credit card companies, you can also select one after comparing their incentives with each other.
We briefly discussed the importance of comparing the credit cards. There are tools that can be used to compare credit cards with one another, for example, using comparison websites. However, there are a few credit card companies that do not appear on those websites. So, you would have to look around on your own.
There are multiple factors that need to be considered for the selection of a credit card. The annual percentage rate (APR) is the interest you would pay at the end of the year. In addition, consider the extra charges and incentives while selecting the credit card. How does debt consolidation work?
If you are unable to pay the complete balance, the credit card company requires the payment of a specified minimal amount. Then, you consider the annual fee you have to pay for using the credit card.
After a certain period of time, the interest rate increases. The period of time and the interest rate vary from company to company. Before selecting a credit card, you should also check this factor.
Lastly, you should also consider the loyalty points, rewards, and any other incentives of the credit card. The cash back factor can also play an important role. You have to evaluate the amount of money that will be received.
Poor Credit Score
If you have a credit score lower than 549, a large number of credit companies would not cater to your needs. However, a new credit card can give you the opportunity to start a new credit and rebuild your credit card history. This will be beneficial for you to be eligible for getting a personal loan.
Despite a number of credit card companies that will reject your credit card applications, there are a few credit card companies that are willing to accept your application.
Store Credit Card
You can use the store credit cards rather than the things that are supported by Visa or MasterCard. Additionally, this type of credit card does improve your credit score, if it is managed properly.
Secured Credit Cards
Paying a security deposit for a credit card usually scares off potential borrowers. However, borrowers with a low credit score can use this to avail a secured credit card. After a while, the credit card becomes unsecured.
Credit Card Unions
There are several unions that also provide us with credit cards. A credit union loan will also help you improve the credit card history.
You may have a limited credit in the beginning due to the poor credit score. At the end of the day, you will have to sacrifice for improving the credit. Keep the goal to pay off your dues on time and focus on improving the credit card.
Furthermore, you need to work on improving the credit score. If you are unemployed, find a job to establish stability. Companies are legally restricted from providing unemployed individuals credit cards. So, you need to work on paying off the loans and clearing the credit. Improving the credit history is important and is possible after fixing the credit history. In the next step, you need to start saving to apply for a credit card. This will let the lenders know that you have enough money saved up to pay off the credit.
All loan terms are between you and the lender that may offer you short term credit. We have no access to the interest rate, loan duration, payment amounts, or annual percentage rate (APR). Not all lenders are able to offer you the amount you request. Annual percentage rate may be dictated by the laws of the state where you reside. This may limit your ability to access credit. All lending decisions are made by lenders, not us. Read all terms and conditions provided by the lender prior to accepting a legally binding loan agreement.
Short term credit is not a long term financial solution. It should only be use in an emergency until a less expensive option is available. Void where prohibited.
We receive compensation from lenders for providing your information in an attempt to help you get a funded by one of these lenders. We make no guarantee you will receive the amount you request on your application or that you will receive any loan offer with specific terms. Everything on our website should be considered an advertisement that we may be compensated for.
Most of the lenders in our network do not use a typical credit check, meaning with the 3 main credit bureaus. They may review an personal loan industry specific report such as DataX or Teletrack.
Services on our website are free to use. You will not be charged to submit an application. Installment loans and payday loans should be use only as a temporary solution.
Must be 18 years old to apply and be a full time citizen of the United States.
If you have any complaints about a lender you can contact the Consumer Financial Protection Bureau (CFPB) at:
Mail a complaint
Consumer Financial Protection Bureau
PO Box 2900
Clinton, IA 52733-2900
or call: (855) 411-2372