If you have poor credit, you may have trouble getting a credit card. This is because new creditors hesitate to take on someone who may be a greater risk of defaulting on their agreement. Is there any hope of rebuilding credit once you’re at that point? How can you rebuild your credit once you’re in this condition?
If you ask for a credit card through a smaller retail store, you might be pleasantly surprised. Often these are less particular about credit history. You want them to report your good history to the credit bureau, so you’re your good history is building up with them. Some companies don’t report good history, only bad, so it’s important to ask.
If you ask, your credit union or bank might have a credit card program you’ll qualify for. Chances are good that they will be willing to set up a credit card for you, because you already have a working relationship with them. Be sure you pay them off in a timely manner to keep in good graces with them.
You can probably get a secured credit card if the two options above don’t pan out. If you set up a savings account with the credit card company, they will extend you credit. This account is secured with the savings account, so if you default on your credit card, they will use some of your savings to pay off the debt. Your amount of credit is directly linked to the amount in your saving. Your credit limit will increase as you save money in that account.
Staying out of credit card deep water is easier if you follow some rules of the credit game. Try to get a card with no annual fee—there are many cards like this available, and why pay a fee if you don’t have to? If you are denied credit, make the most of the experience by requesting your free credit report they are obligated to provide if credit isn’t extended. Stick to the well-established companies like Visa, Mastercard, and American Express, as they are able to be used in many more places than small individual stores’ credit cards. Those who avoid the credit card trap are those who don’t overspend—keep in mind the amount you’ve charged each month on a paper you keep with the card or only use your credit card for certain, limited, purchases. Pay off your balance in full every single month—don’t get caught paying only the minimum amount due or you’ll be paying much more than you originally charged.
