How to find the right credit card when you have poor credit

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How to find the right credit card when you have poor credit
2 years ago
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One effective strategy for rebuilding your credit is getting a new credit card and using it properly to establish a new, more responsible credit history. However, you should not get just about any credit card. You need to find the right card even if you have poor credit at the moment. It may be difficult but you can find one. Be realistic; do not expect to find credit cards with the same features that you enjoyed before, when you still had very good credit. Realize that credit cards approved for people with poor credit usually have low credit limits and are charged higher interest rates. Your goal now is to find the best offer among such credit cards for people with bad credit because that will be the right credit card for you.


Interest Rates
Although interest rates on credit cards for people with problem credit are generally higher than interest rates on regular cards, the rates vary from one card issuer to the next. Do try to shop around until you find one that is priced comparably lower than the others. Even a 0.25% or 0.5% difference will save you a few dollars in finance charges. And when you have repaired your credit, you can easily get approval for another credit card with lower interest rates. By then, you can cancel your card with the higher interest rate.


Fees
Credit card issuing companies also impose additional fees on "bad credit" credit cards. This is to provide them with a protective cover against the higher risk associated with potentially problem accounts. Some people contend these establishments are only taking advantage of customers who have no choice but to pay those fees if they want to get a credit card and use it to fix their credit. In your case, you may want to shop for a card that charges the least fee and collects it less frequently.

You will also have to pay some sort of origination fee on this type of credit cards. Whether the credit card issuing companies call it application fee, activation fee, or some other term, the fee usually includes the annual fee plus other fees like administrative or processing fee for the account opening, and the maintenance fee for the initial month.

It is common among people with poor credit to find their new credit card account has already been charged by as much as $250 even before they receive their card. This means that if you are granted a $300 credit limit, you are left with only $50 to use on your purchases. Thus, do your research; find the right credit card, one that charges the least of these kinds of fees.


Credit Limit
The credit limit set on the card for a customer with bad credit is anywhere between $250 and $500 although the limit most often granted is $300. And as mentioned, you cannot immediately enjoy this credit because of the initial fees. The sooner you pay off those fees, the sooner you can use the credit privilege of your new card.

Try to be more responsible this time with your new credit card and pay your bills promptly. If you set a good payment history over a period of six months to one year, the card issuing company may review your account and increase your credit limit. If you are not given the automatic raise, you can phone the issuing company to request for an increase. Use the toll free number printed on the reverse side of your card. However, ask for an increase only if you have held the card for longer than six months and if you have been diligently paying your monthly bills, or at least the required minimum payment.

It may take a lot of effort and perhaps a long search but you can find the right credit card even if you have poor credit. It will give you the perfect opportunity to re-establish your credit worthiness. Besides it can also prove itself useful if ever you have to buy something on credit.
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