Are You Eligible?

It’s possible to get a credit card, even if you have tarnished credit. However, you should be prepared for a longer search and a few rejections along the way. When you are approved, expect higher interest rates and additional annual fees.

The most eligible candidates are those with steady employment and no delinquent accounts for the past six months. If your bad credit is old, rather than recent, that will help your case as well. You may consider getting a co-signer, but remember that he or she will be on the hook for any debt you might accrue.

credit card signage 

Possible Pitfalls 

Here’s the problem with credit cards for those with bad credit: Banks don’t like to get burned. Since your history shows unpaid debt, any credit-card issuer is going to make sure they’re not going to lose out by issuing plastic to you.

What does that mean? You’re looking at a steeper cost for credit, since banks will likely consider you a subprime consumer. Additionally, make sure you read the fine print on any agreement from a credit-card issuer, particularly those in the subprime category, so you won’t wind up paying a huge slate of fees that eat up a good part of your credit line. 

Video: Top Three Credit Cards

What Cards Are Available? 

Here is a list of credit-card offers for consumers with bad credit: 

You can find a more extensive list at FindCreditCards.org. Remember to carefully research each credit offer before applying. 

The Prepaid Option 

If you’re having trouble getting approved for a standard credit card, you might want to consider a prepaid card. You open a prepaid credit-card account by depositing money into a specific account, much like a checking or savings account. In fact, prepaid cards are more like debit cards in the sense that you can only spend the money that you have available.

credit cards for bad credit 

Prepaid cards require a fee – typically $5-$10 – to establish an account. Additionally, you’ll pay a fee each time you deposit money into that account. You’ll find a list of prepaid credit card offers at JSnet.org. 

Video: World's Worst Credit Card?

However, you should be aware that prepaid credit cards have their limits. Though you can FTC (Federal Trade Commission)use them to reserve hotel rooms, rental cars, and airplane tickets, you cannot use them for ongoing expenses such as phone or internet service. That’s because many companies worry that the prepaid card account may be empty when the bill comes due. 

It’s never too late to improve your credit, though. The main factor is time: Most items will drop off your credit report within seven years. In the meantime, you can work on improving your credit so that obtaining a standard credit card is easier. For tips on improving credit, visit the Federal Trade Commission’s website.