How to Obtain Credit Cards With Bad Credit
- 1). Apply at your bank or credit union first. Don't automatically assume that you must apply only for credit cards marketed to people with poor credit. Your bank or credit union may approve you for a full-featured, unsecured credit card based on your banking history.
- 2). Get a cosigner. A family member or friend with excellent credit can help you get approved for a credit card by cosigning. However, the friend or family member will be responsible for the entire balance if you default. Applying at the cosigner's bank may lead to fast approval.
- 3). Apply for a secured credit card if you're turned down for an unsecured card or if you do not have a cosigner. Secured cards are full-featured MasterCard or Visa credit cards tied to your savings account. Money in your savings account--usually at least $200--becomes collateral for the card, making for easier approval. You don't have to have an existing savings account at the bank to apply.
- 4). Find cards marketed to people with poor credit. Check credit card comparison websites for banks willing to issue unsecured credit cards to people with bad credit. The upfront costs can be steep, however. In 2010, one bank was offering an unsecured MasterCard with an initial credit limit of $300--along with an application fee of $95, an annual fee of $75 and an initial interest rate of nearly 25 percent. The whopping interest rate and first-year fees remove much of the risk for the bank, making credit approval likely for a wide range of bad credit borrowers.
- 5). Apply for department store credit cards. Department store credit cards generally offer easier approval, and a positive payment history could help rebuild your credit and eventually lead to approval for a MasterCard or Visa.
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