In case you have a very bad credit score, getting approved for credit cards and loans can be an extremely difficult task. Fortunately, even with a bad credit score, you still have several options, which we shall look at in this article.
So, What Is A Bad Credit Score?
When talking about getting credit through credit cards, the magic number that financial institutions consider is between 620 and 650. In case your score is below 650, you will have a hard time when it comes to getting credit from any respectable lending institution, and in case it is lower than 620, it will be even much difficult getting credit from any lending organization- this includes small financial organizations such as independent marketplace lenders and credit unions.
However, there are other products that you will easily qualify for. Before you start working on your credit card application, it is recommended that you make sure that you are well-prepared for the new line of credit so that it can help you in improving your credit score and credit history, instead of causing it more damage. To do this perfectly, take your time and come up with a budget that you will stick to. In this article, we will look at a few credit cards that you will still qualify for even if you have a bad credit score. Below are a few examples:
1. Capital One Secured Mastercard
This credit card is recommended for those individuals who do not wish to commit huge amount of money as a security deposit when applying for a credit card. This card provides its users with large credit limits when compared to what it demands as a security deposit fee. For example, a security deposit of $49 can get you a credit line of $200. This is one of the best credit cards out there, especially when you consider that a majority of the secured credit cards companies offer it users a credit limit that matches the security deposit that they provided during application.
Another added advantage of getting this card is that you may qualify for a higher credit line after you have made 5 on-time monthly payments. A majority of credit cards companies do not usually disclose to their clients the time-frame for credit line increases.
2. Discover It Student Cash Back
This is the best choice for students who do not have a credit history since it is very easy to qualify for and it provides users with an industry-leading rewards rate. The 5 percent cash back that cardholders earn in rotating categories beats the cash back rates that are provided by leading top cash back cards. However, the 5 percent cash back rewards are limited by a quarterly cap. The credit card also offers 1 percent cash back on all your other purchases- this is a notch below the top available cash back rates for college students.
3. Savings Secured Visa Platinum Card
This card is the best choice for those applicants who have very low credit scores since it offers its users a very competitive APR among all other secured credit cards at 13.49 percent. It is very common for credit cards that target individuals with imperfect credit histories to have APRs which exceed 20 percent. Therefore, if you want to save money that you will have spent on credit card interest, this is the credit card for you.
This credit card also does not charge balance transfer fees, which saves cardholders hundreds of dollars, especially when you consider that other credit card companies charge balance transfer fees of between 3 and 5 percent of the amount that is being transferred.
4. Discover It Secured
This is the best card for those individuals who have bad credit scores since it allows cardholders to rebuild their credit scores while at the same time giving them lucrative cash back rewards. Presently, the credit card provides cardholders with an average of 2 percent cash back on purchases at gas stations and even restaurants, up to a maximum of $1,000 for each quarter. This is an excellent cash back rate when compared to other cash back cards in the market today.
5. AeroMexico Visa Secured Card
This is the best card for applicants who have extremely low credit scores and are interested in getting miles. With this credit card, you get a 1 percent rewards rate for all eligible purchases. However, what makes this card stand out from the rest is its $99 companion pass. This pass allows users to purchase an extra ticket on an AeroMexico airline flight for a mere $99. This is something that is not available on credit cards that are targeted towards individuals with bad credit scores. With the roundtrip from New York to Cancun currently being $671, using this companion pass to get a flight ticket will yield an excellent rewards value of $550.