Millions of people with bad credit or no credit have a hard time getting approved for a major credit card. Unfortunately, getting credit for the first time is just as hard as getting it back. Both of these types of people are seen as risky by lenders. So, they are less likely to offer a credit line. But there are ways to deal with this issue. Credit cards for people with bad credit are meant to make it easier for some people to get credit.
What's Important...
Millions of people with bad credit or no credit have a hard time getting approved for a major credit card. Unfortunately, getting credit for the first time is just as hard as getting it back. Both of these types of people are seen as risky by lenders. So, they are less likely to offer a credit line. But there are ways to deal with this issue. Credit cards for people with bad credit are meant to make it easier for some people to get credit.
Why it's important to build a good credit history
Even if you have bad credit, you will be able to get loans for things like a home or car. But having good credit does have its perks. People with good credit get the best rates on mortgages and car loans.
Some people might not care much about low rates. Yet, loans with low interest rates could save you hundreds of dollars each month. Also, having good credit opens the door to better ways to finance things.
What having no credit and having bad credit have in common
Even though it's not fair, some lenders put people with no credit and people with bad credit in the same group. This makes it harder for young people and people trying to build credit. People with bad credit have made mistakes that make lenders hesitant to give them money. On the other hand, people who have never had credit have never made a mistake. So, why do some lenders say no to people who have never borrowed money before?
Before giving you a credit card or loan, lenders will look at your credit report to see how you've dealt with other creditors in the past. It's a way to figure out how likely an applicant is to pay back money. If you don't have a credit history, lenders don't know what to do with you. They would rather turn down an application than take a chance.
How to Get a Credit Card with Bad Credit
It's easy to get a credit card even if you have bad credit. Finding a lender who specialises in this kind of credit is hard. Make good use of the Internet. Many places that offer credit cards to people with bad credit let you apply online and get an answer right away. This is one of the easiest ways to start building up a good credit history.
There are two kinds of credit cards for people with bad credit. If you are given an unsecured card, your credit limit may be low at first. But if you keep making payments on time, the creditor may slowly let you spend more. Those who want a secured credit card must open a savings account with the lender. If you decide to stop making payments, this account will be used as security.
