There is a certain credit card that has been produced especially for people who have low credit. For instance, the Capital One Classic Platinum accepts applicants with credit scores as low as 577 according to CreditKarma.com. The card has a 22.9% regular APR and $39 yearly fee. The annual fee might be relinquished if ask.
Orchard Bank credit cards were formerly a very good option for people with such low credit. But then, the company that issued Orchard Bank cards (HSBC) was bought over by Capital One in 2012 and the Orchard Bank cards were cut off.
Merchandise stores have a name or character for accepting applicants who have bad credit. From these stores, you stand a better chance of getting approved for a limited purpose credit card that can only be used at that store rather than a credit card backed by Visa or MasterCard.
Remember that most retail store credit cards usually come with very low credit limits and high interest rates. One of The best methods to contend a card such as this is to charge a small amount and pay your balance in full each month.
When Applying Be ready to make a Deposit
Most people have written off secured credit cards because the cards require a security deposit to be made upon the credit limit. A secured credit card that reports to the major department is better than having no credit card at all. Many secured credit cards can be turned into unsecured credit cards after a year quick payment.
If the constraints for you obtaining a secured credit card is the security deposit, then it would be wise for you to start saving $100 in a savings account each month. You would be having $500 to deposit towards a secured credit card. Some part of the money saved can be used to take care of the application fee and the rest can be put toward your credit card balance.
With the Capital One Secured MasterCard, you have to make a security deposit as low as $49 or $99 for a $200 credit limit depending on your credit. With very negative credit, you’ll have to pay the whole minimum $200 security deposit, but you can get up to amount in four months by saving $50 a month.
Be ready to also to make the necessary sacrifice to meet the aim of enhancing your credit. With Your accountability with the payments on the balance, your deposit will be returned to you.
Don’t be Moved on Credit Cards for Good or Excellent Credit
Stay away from applying for credit cards channeled for people with high credit scores. It is very possible for you to be deprived and the additional applications can damage your credit score even more.
Normally you can tell a credit card is aimed for someone with excellent credit by the rewards it provides. Credit cards with excellent rewards, low APRs, and promotional interest rates are always aimed at consumers with excellent credit. Applicants with poor credit scores are usually denied.
What to Look Out For in Any Offer
Be mindful of higher interest rate credit cards, which charge high upfront fees which take up most of your credit limit. Though Federal law limits the number of fees to 25% of the credit limit, a subprime credit card issuer has gotten around the law by assessing a $90 fee before the credit card is ever issued. Credit cards issued by First Premier and Capital One banks are examples of credit cards to avoid.
Prepaid cards most times are shown as an option for people with negative credit, but these aren’t really credit cards. Prepaid cards require you to make a deposit before you can use it to make purchases. But unlike secured credit cards, your prepaid card purchases are removed from your balance. Your credit is not improved by prepaid cards either because they don’t report to the major credit department.