Finding a Credit Card for Bad Credit - Finance

It can be a particularly difficult thing to go through, applying for a credit card(CC) when your credit report screams "Unreliable!". The only kinds of cards you are offered, usually come with penalties like an expensive annual fee. The banks know that you don't have much of a choice; with a product like a credit card for bad credit, they will usually try to get away with charging you very high interest rates as well. Since a CC today is a real basic essential, you probably would like to get some kind of card product even if you have to deal with terms that are not exactly favorable.

Before you take the plunge and accept a credit card that comes with all kinds of penalizing terms, you probably want to take a close look at why it is that you so badly want a credit card in the first place. If you feel that a credit card helps you feel better about yourself, perhaps you should work hard to improve your credit score for some time before you apply. The fact that you have a bad credit score shows that you already have a high level of debt to deal with. Getting a new CC will almost certainly lower your credit score further. If you are getting a credit card to get a new line of credit that will only push you deeper into debt, that would be a terrible idea. You could consider using a debit card instead if all you need is something to do some shopping online with or to get hotel and flight reservations or take out car rentals.

If you qualify for checking account, more often than not, you'll qualify for a debit card as well. All you need to do is to put money in your account up front before you rent that car, make a hotel reservation, or buy those tickets. If you could open a separate checking account just for the use you will get out of your debit card, you won't have to bother with the way some businesses will put a hold on your card for an amount that's slightly higher than the purchase price. Debit cards are mostly free to operate. And anyone who sees you holding one will think you have a CC - no one will know the difference.

A credit card for bad credit is certainly possible though, if you are determined enough; you could for instance, find a family member with good credit who's willing to cosign. Once they cosign, you can get some pretty favorable terms. But you do want to make sure that you don't default. Because if you do, they'll be liable for it and it will probably affect the relationship you have with them. In the end, if all else fails, you could probably get acollateral backed secured CC. The fees are high, but you can never completely default on these because you leave a sum of money in deposit with the bank for what you get to spend.