tips & advice
Credit Cards Poor Credit
Is a poor credit score making your credit card shopping difficult? While a little more limited, you do have several options. If you have poor credit you may have to start out with a credit card with higher interest rates and lower credit limits. If managed responsibly, a poor credit credit card can help you rebuild your credit to a point where you can qualify for better rates and terms in the future.
There are a few traditional credit cards that are available for those with poor credit. But if those are out of reach, a secured card is a very good option. These work by paying a certain amount down to establish a borrowing limit prior to obtaining the card. Many secured credit cards report to the credit bureaus, so they are good for rebuilding credit.
While they don't help you rebuild your credit, prepaid cards are a popular option for those who don't have a checking account or want a simpler approach.
Given the sheer number of options out there, picking a credit card can seem like an incredibly daunting task. There are so many different types of credit cards, geared to different types of consumers, knowing where the decision making process can be a real challenge. The truth is that if you keep a few important principles in mind, choosing a credit card doesn't have to be stressful ... nor does it have to be a crapshoot. So let's get started.
Know Your Credit Score Before You Apply for a
Credit Card **
Knowing your credit score before you apply for a credit card is important, because particular credit cards are developed for consumers who fall within a particular credit score range. Here are the five generally accepted credit score ranges.
- Excellent Credit (750+)
- Good Credit (700-749)
- Fair Credit (650-699)
- Poor Credit (600-649)
- Bad Credit (below 599)
What this means is that someone with a credit score of 640 shouldn't be applying for credit cards meant for people with excellent credit, because he or she will likely be denied, and if you apply for too many credit cards at the same time, your credit score could suffer. Back to top.
How to Compare Credit Cards
In order to effectively compare credit cards you'll want to use a tool, like the credit card comparison tool on Credit.com, but you'll also need to know what to look for. There are a couple of key indicators.
- APR - This stands for Annual Percentage Rate and it represents how much you'll be charged for carrying a balance on your credit card. If you carry a balance of $100 for a year, and your interest rate is 10%, then you'll be charged $10. These rates vary based on your credit score. The better your score, the lower your rate is likely to be.
- Fees - Credit cards may have a number of types of fees associated with them. Annual fees, late fees, over-limit fees and loyalty fees are just a few. You'll want to make sure you understand which fees, if any, apply
- Rewards - There are lots of kinds of rewards credit cards available - cash-back rewards, mileage rewards, travel rewards and more. It's important to play close attention to the terms of the rewards programs, so you can compare them accurately.
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Tips to Consider When Applying for Credit Cards
If you're not sure what your credit looks like, and, as a result, what kind of credit cards you should be applying, you can use Credit.com's free Credit Report Card for an easy-to-understand breakdown of your credit history, along with your free credit scores. If you see something that doesn't seem quite right, you are entitled to a free copy of each of your three credit reports once a year, and you can check them for inaccuracies, and ask the credit bureaus to correct them. Back to top.