Credit Cards For Less Than Perfect Credit

Getting a Credit Card When You Have Bad Credit

November 27, 2008 – 3:57 pm

If you have bad credit, getting a credit card is difficult, but not always impossible. Once you get your finances under control, your goal is to build your way to a regular credit card issued by a bank. There are several ways to do this, from applying for a card from a small retailer or gasoline company to getting a secured credit card.

Is Having a Credit Card a Good Idea?

Before you try to get a new credit card, be honest about whether you will use it wisely. Credit cards can be dangerous to your financial well-being if you use them to buy things you cannot afford. If misusing credit cards is what caused your credit rating to sink in the first place, then perhaps it would be wise to steer clear of credit cards for the time being.

However, there are several very good reasons to have a credit card:

* For an emergency: A credit card can be a lifesaver if you have to pay for emergency expenses that go beyond your savings — for example, repairing a leaky roof or paying for a necessary medical procedure. Charge the expense, and then pay it off as quickly as possible.
* To build credit: A good way to develop a positive credit history is to obtain a credit card and make timely payments. But beware: If you can’t pay the balance off each month, don’t use it.
* To get airline miles or other “points” : If you pay your credit card balance off each month, you can get airline miles or points towards other goods and services for free (assuming your card does not have an annual fee).
* To reserve hotel rooms or rental cars: Many hotels, car rental companies, and other vacation amenities require a credit card in order to make a reservation.

Steps to Getting a Credit Card

If you can’t get a credit card right away, take steps to build credit. In this way, you can work your way towards a credit card:

Open bank deposit accounts. Creditors look for bank accounts as a sign of stability and proof that you can pay your bills. In fact, most credit card applications require a checking account number.

Start with a small retail store or gasoline company card. These are often the easiest cards to get. If you get a card, charge items, and pay the bill on time. This will start building a positive credit history for other credit card holders to look at.

Apply for a bank credit card with a low credit line. Next, apply for a regular bank credit card (such as Visa or MasterCard) with a low credit line. At first, you may only qualify for a card with high interest rates and a high annual fee. If you use your card responsibly, after a year you can apply for an increase in your credit line and a decrease in your interest rate and annual fee. Or, you can apply for another card that has better terms.

Tags: Bad credit, Bad Credit History, Build Credit, Get a Card, No Credit, Rebuild Credit

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Credit Cards for No Credit History

November 24, 2008 – 11:23 am

You have turned 18 or maybe you have just walked onto the university campus when you are hit by a barrage of credit card company reps trying to butter you up for their credit card with some seriously sweet swag. While you may have a tough time turning away the free plastic cups, nifty key chains, or just the dozens of offers that flood your mailbox, using a credit card is a decision that can impact your finances until the day you die.

Let’s choose a right credit card!

There are literally hundreds of different cards that you can choose from. Some offer airline miles, while others may offer you points towards merchandise or free gasoline. One of my first credit cards was a Star Wars card which offered points towards Star Wars memorabilia and had a photo of Yoda on the card. Yes, this definitely was a card I applied for in college, and except for one major computer purchase, it has sat unused in my wallet for years.

Here are some tips towards choosing that first credit card:

1) Choose a card with a low interest rate. Though it is difficult to get a lower interest rate until you have established some credit history, try to aim for a percentage closer to 9.99% fixed or less. Do not even sign onto any credit cards that offer above 16.99%, whatever they try to sell you. Credit card companies are desperate enough for good customers that you do not need to settle for credit card sharking.

2) Choose a card that gives you a monetary percentage back for purchases. The credit card I use gives me 5% back on all grocery and gas purchases, as well as 1% back on all purchases. That means that a few times a year, I receive a check from the credit card company. Although there are many credit cards out there with air miles, unless you plan to spend thousands of dollars in credit cards (usually not a wise decision unless you are incredibly disciplined), you will not see the returns on your purchases.

3) Choose a card accepted at most locations. Joe and Jim’s Credit Card may be acceptable at the corner grocery store, but it will not help you at all if you plan to travel outside the city limits. So you should choose Visa or MasterCard instead

Tags: Build Credit, Credit Cards, No Credit, No Credit History

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