What credit card options exist for people with bad credit?
Answered on Tuesday, October 12th, 2010 by
James Williams
The content is accurate at the time of publication and is subject to change.

People with bad credit history require credit cards that are approved without credit checks. Although majority of credit card companies perform credit checks before approving the applications, there are a number of companies that provide no credit check cards. These cards are referred to as bad credit cards, since they are good options for people with bad credit history.

The first thing that comes to mind when applying for bad credit cards is the prepaid card or a secured credit card option. Prepaid card has both advantages and disadvantages of usage. For people with bad credit, paying money upfront might be a difficulty, which is one of the reasons they will look for credit cards. But prepaid credit cards need the user to load the card with some amount before using them. So does the secured credit cards, where the applicant must deposit a specific amount as security, and the credit limit will be the amount deposited. Although these cards are helpful to shop online and make travel bookings and reservations, they are limited to the amount a user can prepay, in order to use the card. Also, prepaid cards don`t come for free; they come with a transaction fee for using the card.

Some credit card companies offer unsecured credit cards which works exactly the same as regular credit cards. The user will be preapproved for a certain amount of credit. The catch here is that the credit card company withholds a certain amount of the preapproved credit limit as a security, and only the remaining amount will be available to the user as a credit limit. These cards work in a way like secured credit cards, but the user need not pay the deposit amount upfront, which makes these cards more desirable than the secured credit cards.

People with bad credit can apply for regular credit cards too. Although credit checks can be avoided, credit card companies charge a very high rate of interest for bad credit history applicants. Also, the available credit limits will be much lower compared to good credit history applicants. Also, the fines, late payment charges and hidden costs will be much higher for bad credit history applicants. Before applying to credit cards, making sure that the company accepts bad credit history applications is mandatory. Any rejection of application can do further harm to credit history and lower the credit scores. Careful comparison of all the options before signing up, can lead to the best decision, and can help recover from a bad credit history.

All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.

Other Popular Bad Credit Card FAQs

While this may sound like a rational decision, it is not. Co-branded credit cards, like the SuperAmerica credit card, are not the best choice for building credit, they are simply not meant for that. They are limited in use – you wil most likely be able to use a card only for one brand purchases – which won’t be much help in credit building.

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With a poor credit history, there’s not much of a choice for you, but you still have some options. There’s no guarantee that a MAPCO co-branded credit card will be approved for you. Besides, one of your goals would be to build credit to be able to apply for more better cards.

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