Best Credit Cards for Bad Credit in December 2023

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Using a credit card for bad credit is an opportunity to improve your credit profile, but it’s important to know what to look for in this kind of credit card. Here are some key factors to consider:

What’s your credit score?

Your credit score helps you narrow down which credit cards could give you the best chances for approval. It’s also essential to understand the factors that affect your score so that you can avoid pitfalls that will slow down your credit-building progress and show creditors you know how to use a credit card responsibly.

Does the issuer report to the three major credit bureaus?

Most reputable credit card issuers report your credit use to all three credit bureaus: Experian, TransUnion and Equifax. Reporting to all three is important as lenders may choose to review your credit using any one of the three. If a card doesn’t report to all three, you run the risk of a lender reviewing an outdated credit score. Credit-building card issuers will often advertise whether they report to all three bureaus, but if you’re unsure, contact the issuer to check.

Do you know all the fees?

Watch out for common credit card fees, which can be especially high on cards for people with low credit scores. These include annual fees, late fees, monthly maintenance fees, penalty APRs and balance transfer fees. Such fees can add to your debt and make it harder to build credit. Fortunately, the right credit card and responsible use can help you avoid many of these extra costs.

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Do you understand the terms and conditions?

Some cards for bad credit have terms and conditions that are hard to understand — even for some credit card experts. Cards can seem intentionally vague about the type of card you’ll receive or what the annual fee or ongoing APR will be until you go through with an application and a hard pull on your credit. To save your wallet, look at the card’s Schumer Box and read the terms and conditions thoroughly to avoid any issues.

What’s your plan as your score improves?

As your credit score starts to increase, you’ll need to be ready for new opportunities. The best credit cards for bad credit offer chances to graduate or upgrade to a better card with better terms. If you practice good credit habits, your card issuer may refund your security deposit on a secured card or increase your credit limit. Make sure you know how to compare credit cards ahead of time so you know what features you want and what cards to avoid.

Here’s what one Bankrate expert wants you to know about credit cards for bad credit

Bankrate editor Ashley Parks wants people to understand the differences between having no credit and having bad credit while emphasizing that it’s possible to build to a good score no matter where you’re starting from. 

“Having no credit and having bad credit are not the same. Having no credit means you have no record of how you manage credit, making it difficult for lenders and issuers to gauge your creditworthiness. Alternatively, bad credit can be a result of missed payments, several hard credit pulls in a short time or a bankruptcy filing on your credit report.

Whether you have no credit or bad credit, choosing a card that reports your progress to the credit bureaus and offers tools to help you stay on track is key to getting started on a successful credit-building journey.”

— Ashley Parks, Editor, Credit Cards

Still unsure if a credit card is right for you even if you have bad credit? Check out our Credit Card Spender Type Tool, where you can get personalized credit card recommendations based on your credit score, spending habits and daily needs.

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