Credit history is critical if you are hoping to get a credit card. Anyone with a bad credit history is probably going to have their application rejected by most major banks.
This is because you are a bad risk, if your credit is bad. A bank that offers you a credit card is basically loaning you money. A bad credit rating means that you are at high risk of defaulting or not paying in a regular and timely manner. If you do manage to get a card, you’ll likely be charged a very high interest rate.
You also won’t have a high spending limit. People with good credit are trusted with more money than are people with bad credit, that’s just a fact.
If you have a bad credit history and bad score, you will likely need to start rebuilding your credit with a secured card. Take out any protection offered through the card too.
How does a secured card work, you ask? It’s simple. The bank requires you to have a savings account or other account, and will issue a card that is linked to the account. It generally has a spending limit that is equal to or even less than the amount you have in your account. Different lenders have different rules for credit limits, and for specifics you will need to check the terms.
You can also opt to take out a joint credit account, if you have a negative credit history. To do this, you have to have a second person with good credit, usually a family member, who is willing to be on the account with you.
You need to make sure you can make the monthly payment though. It’s important. Your rates may be under the normal interest rate, and certainly under the rate for someone with bad credit – but only if you pay as agreed and on time.
Depending on the lender and the card, you may even have to pay a fee. Sometimes this is a one-time fee, and other times it is a yearly fee. Check the specific terms of the agreement you have with the issuer before you accept the terms of the account.
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