Credit Cards for Poor Credit

Credit Cards For Average Credit Ratings

May 19th, 2009

creditscoreIf you don’t have especially good credit rating and are around the average level, there are plenty of credit card options for you.  While you may be declined on your application to most of the best credit card offerings (e.g. Plum Card, Discover More), you should be able to qualify for a decent unsecured card.

An unsecured credit card with no annual fee but little else in terms of perks is easily available to people with average credit scores.  It’s just likely that all your attention is fixed on the high-end cards that you don’t notice the plethora of offerings available to those with credit ratings just like yours.

Try one of these cards on for size:

1. Citi Platinum Select Mastercard

With no annual fees and pretty decent APR, the Citi Platinum Select is a credit card that’s absolutely within your means to get.  What I particularly like about is the extra layer of security it provides for online shoppers, via a separate secure number (that’s different from your actual credit card number) for use when you buy items over the web.

2. HSBC American DreamCard Mastercard

While not necessarily a sub-prime credit card, the American DreamCard Mastercard is specifically intended for those with decent but relatively low credit scores.  It used to be bundled with HSBC’s sub-prime card offerings but is actually better than the lot of credit cards usually available to those with bad credit.  It has no annual fee and usually approves anyone with a credit rating above 600.

3. Amex Rewards Gold Card

You’ll need to be employed with a decent income to qualify for this rewards card, but it’s worth applying for anyway.  It comes with a steep annual fee but if you intend to use the card frequently, their rewards program is one of the most attractive you can find.

Using Gas Credit Cards To Build Up Your Credit Score

April 26th, 2009

gascardWhen you’re trying to improve your credit ratings, store cards are among the easiest credit lines you can apply for.  As such, we’ve recommended applying for in-house credit cards many times over to people who are struggling with bad credit.  What many seem to overlook, though, are gas station-branded credit cards.

Just Like Store Cards

If you frequent a local gas station in your area, you should ask them if they issue credit cards to regular customers.  For the most part, gas credit cards function like dedicated store cards, allowing you to make transactions on that store alone.  While it’s likely not going to pack as many features as other bank-issued credit cards, they should be a helpful tool in building up your credit ratings – and every little bit helps.

Easy To Get

Since you don’t get much perks (or much leeway, for that matter) with gas credit cards, they’re usually easier to apply for.  In fact, some people claim they’re even easier to get than secured credit cards, requiring far more lenient procedures in processing your application.

Regular Use

If you drive at all on a regular basis, there should be no problem keeping a gas credit card active.  Even better, since you’re not likely to run up thousands in expenses (unlike some store credit cards can tempt you to), they’re also easier to manage.  Some gas credit cards will even have rewards tied in, although I’d rather not bother with that since their benefits are usually too marginal to be of any significance.

Getting An Unsecured Credit Card For Those With Poor Credit Ratings

April 15th, 2009

stampsFor most folks with bad credit scores, getting an unsecured credit card will usually be out of reach.  While it doesn’t hurt to try, realize that more inquiries into your credit ratings will just serve to bring it down even further.  If you really want to try getting an unsecured card even at your present credit standing, just apply to one.  If it doesn’t work fine, just get a secured card, in the meantime.

Of course, you can use the secured credit card to start building up your credit ratings.  Just follow the typical guidelines for responsible credit card usekeep low balances (or zero, if you can manage it), always pay on time and never go over your credit limit.

According to most financial experts, people usually need at least three revolving credit accounts in order to maximize your credit score.  As such, it is highly recommended that you try to get two more cards after you’ve been using the secured one for a while.

Wait at least 3 to 6 months before trying to get a second credit card.  Similarly, go for a sub-prime card, as well, for your second account – it’s going to be far easier as your score is unlikely to have gained massive improvements yet.  After using both credit accounts for at least four months more, you can then apply for an unsecured credit card and actually have a good shot at getting approved.

Patience is key but the rewards should be worth the wait.

Store Credit Cards: The Beginning Of The End?

March 21st, 2009

storecredit1Store credit cards have been a popular option among folks having trouble getting good unsecured credit cards from regular channels.  If you regularly shopped at a store, after all, a private label credit card can be very useful both in the short and long term.

Despite their low credit limits and often higher APRs, we actually recommend obtaining store credit cards as a way to raise your credit ratings.  Of course, you should take the same care using them just like you do with typical credit accounts to maximize those benefits.

According to recent news, though, store credit cards are experiencing some serious bumps on the road with the growing financial crisis in mainstream American society.

Default Accounts

Numbers have shown that charge-offs and deliquent accounts on store credit cards are increasing at an alarming rate, even more so than other credit card sectors.  Since store credit cards usually have smaller credit limits and have limited use (in-store purchases only), more consumers in financial distress seem to be choosing to default on them in favor of their other existing debt.

Less Spending

People have also been spending less in general (due to the economic scare). As a result, stores have been seeing less use of their credit cards even among regular customers.  In fact, almost all stores are now trying to offer some sort of rewards (like gift certificates and other concessions) to encourage better retail sales from their private label cardholders.

Getting A Store Card

With many stores trying to prop up business, this may be a great time for you to get a store credit card to improve your credit score.  Even if you don’t intend to use them all but once or twice, they will increase your overall available credit in possibly enough ways to create noticeable changes.

Rebuilding Your Credit Fast

March 16th, 2009

buildcreditWant to fix up your tarnished credit record quickly?  Do these three things:

1. Challenge your credit report

You can challenge pretty much anything on your credit report.  In fact, when you sign up with one of those credit repair services, that’s exactly what they’ll do.

Doing it by yourself isn’t all that hard either.  Choose the negative items that look the easiest to be removed and challenge three or four of them at a time.   This process will take time, especially since all three credit bureaus will have to update your reports, although once they do, you can expect major changes in your score within 30 days.

2.  Pay down your existing debt

Keeping high balances on your revolving credit, especially when you’re over 50% of your limit for each, pulls down your credit score in a significant way.  Settling your bills on time and paying them down to below 15% of your total credit limit should help ease your credit record woes over time.

3. Avoid Unsecured Credit Cards For People With Bad Credit And Opt For A Secured Card Instead

Sub-prime credit cards generally aren’t great options when you’re trying to raise your credit score.  Furthermore, they’ll often have severely low limits, constricting fees and unusually high interest rates.

A better option will be to apply for a secured credit card instead, where your limit will be equivalent to whatever amount you deposit.  Using one, you can enjoy a higher credit limit than what an unsecured card should get you, which will help with your overall credit score.

Store Credit Cards For People With No Credit

March 6th, 2009

storecreditIf you have no credit and are looking to build up your credit score, do consider getting a store credit card.  They’re usually not as difficult to secure as regular credit cards, while potentially helping your credit ratings to experience a boost.

As far as we can tell, the easiest way to build up your rating is by having two to three revolving credit accounts.  Store credit cards do qualify as a revolving credit account.  If you can acquire one or two of these, along with a secured credit card (or a student credit card, if you go to college), you should be well on your way to building your credit history.

Exercise Restraint

Now, when you do get a couple of store credit cards, don’t go all out shopping with them.  Sure, it’s tempting to buy a new wardrobe with your Gap store credit card or stock up on tools with your Target credit card, but it won’t be the way to make your pristine credit record stick.

In truth, many store credit cards offer lousy deals.  Plenty of them pack on high interest rates, sometimes going as steep as 17%.  Despite offering rewards (such as a $25 certificate when using your store credit card for purchases of up to $500), they’re terrible when put side by side with many credit card offerings.  Keep them as a way to build your credit, occasionally using them for a few small purchases, but no more than that.

Credit Cards For People With (Not So) Bad Credit

January 25th, 2009

Prime credit cards – the ones with all the great perks everyone’s raving about – are usually geared towards those consumers with near-pristine credit ratings. If you’re the owner of a somewhat average, slightly unattractive credit score, you’ll probably need to build up a better credit history in order to qualify for most of them.

That doesn’t mean you’ll have to settle for some bad credit cards though. These three credit cards from Capital One feature decent annual fees and charges comparable to many prime credit card offers, with the only caveat being the lower credit limit you will likely get.

Capital One Classic Platinum

There is a promotional 0% interest rate although the range varies depending on the current offer. You might want to check out Capital One’s website for more details. The APR post-promo is still pretty low (will depend on your score and record of use) and annual fee is a pretty low $19 for both the Visa and Mastercard versions.

Capital One Platinum Max

This is an easy approval credit card for people with slight bad credit ratings. Annual fee is a decent $19 with the APR usually being a competitive rate as well. The interest rate, whatever is determined during your approval, will be fixed for the first three years.

Capital One No Hassle Point Rewards

Most reward credit cards require great credit ratings in order to qualify – this one doesn’t. It’s a full-featured rewards card which earns you five points for every dollar spent on gas, grocery and medicine. Despite a $29 annual fee, this offers plenty of benefits for people who otherwise wouldn’t have a chance to own a rewards card.

Review: The Credit Card That Allows You To Miss Payments

December 19th, 2008

Missing payments is one of the biggest credit card no-no’s but that’s exactly what the Union Plus Mastercard allows you to do. Available to all members of American labor unions, this offers benefits you simply cannot find anywhere else. If you are a union member and do not have this card yet, consider giving up any other credit card you have – this is the only one you need.

Unique Benefits

The Skip Payment privilege allows you to keep from paying up to two times during a twelve month period without penalties. During sanctioned union strikes, you can skip up to four payments for the same twelve-month period. You are not allowed, however, to skip three consecutive payments.

It also includes a scholarship program for union members, their spouses and dependent children – an amazing feature you simply don’t get with a credit card. Along with it is a loan program that features long-term payment options and very competitive rates.

It comes with a rewards package that gives two points for every dollar spent on gas, groceries and medicine. You get 1 point for regular purchases not belonging to the above categories and you receive 2,000 free points after your first purchase on the card.

Fees

This card has no annual fee but APR can range from between 12.99% to 19.99%. There is an introductory APR of 1.99% on the first six months. There are no fees on balance transfers.  Additionally, balance transfer APR will remain the same from the start until it is completely paid off.

Orchard Bank Offers Four Credit Card Options For People With Bad Credit

November 30th, 2008

If you have bad credit and are looking for a credit card, Orchard Bank has some of the best offers you can get. We’ve previously written about the Secured MasterCard from Orchard Bank which is what you can expect to be approved for if your credit really is at the bottom of the ratings. Depending on the company’s assessments of your risk factors, though, it’s possible to get approved for an even better card than the secured unit.

What credit cards can you hope to get approved for from Orchard Bank?

1. Orchard Bank Secured MasterCard

Read our review of Orchard’s secured MasterCard here.

2. Orchard Bank Gold MasterCard

If your credit is bad but not terrible and your credit risk factors don’t appear too unseemly either, you can get approved for an unsecured credit card. Credit limit won’t be too high but the terms will be pretty reasonable. You’ll be required to pay an account set-up fee of $19 and an annual fee between $39 and $96. You can get an APR between 8.9% to 18.9% (most likely you’ll get slotted into the higher end though).

3. Orchard Bank Platinum MasterCard

Another option you can get approved for is the Platinum MasterCard which, unlike the two previous choices, won’t require you to pay to have the account set up. You can also get the extra benefit of no annual fees – although most will likely get between $50 and $72. APR ranges from 8.9% to 18.9%.

4. Orchard Bank Prime MasterCard

If your credit rating is actually better than you expected, Orchard Bank will approve you for the Prime MasterCard. The card has no annual fee and APR is a fixed 15.99%. It carries a few extra benefits, including 0% introductory APR for the first six months.

No Better Options? Get A Sub-Prime Credit Card

November 28th, 2008

If you have bad credit scores, getting a credit card can prove an exercise in futility. You can fill out all the card applications you want – getting approved isn’t likely to happen unless the fates suddenly align in your favor.

In case you really need a credit card, though, for whatever purpose, your best bet is a sub-prime credit card. Laden with less attractive features than regular credit cards, they might be able to serve your purpose – albeit not at the best conditions.

When you’re trying to build up your credit score back to respectable levels, a sub-prime card with low credit limit can help you in your quest. To ensure you get that benefit, make sure that the credit card issuer reports back to the three credit unions (Equifax, TransUnion and Experia) before applying to one.

Fees And Charges

Credit cards for people with bad credit are usually laden with fees considerably higher than normal. Similarly, other terms are likely not as good as what’s on tap elsewhere. Keep that in mind before signing up for one – the cost of maintaining a card like this will be high.

Most credit cards in this category will extort charge you a one-time non-refundable fee the moment you send in an application. It’s not cheap either with some cards charging as high as $150. Remember that it’s non-refundable, which means that money’s gone even if you are eventually disapproved.

Annual membership fees will be high, as expected, with little options in getting it waived. Even worse, most sub-prime credit cards charge a monthly maintenance fee that can add up (around $60 to $80 a month).