Smart Spender Credit Tips: How to Compare Credit Cards
How to Compare Credit Card Offers for People With Bad Credit
Find your credit score.Generally, a credit score of 350-629 is considered poor and 630-689 is average. Your options will depend on your credit score, so find that out before you search for credit cards. You can get your score in the following places:
- Ask a housing counselor or credit counselor to pull your credit score.
- Look at a current credit card or loan statement. Sometimes, your credit score will be listed there.
- Use a free website, such as CreditKarma, to get your credit score.
- Buy your FICO score from myfico.com.
Search online for offers.If you have bad credit, then it’s unlikely you’ll receive offers in the mail. Instead, you should go online to check what kinds of credit cards you qualify for. NerdWallet has a helpful page you can visit.CreditCards.com also has a page with a selection of credit cards for people with bad credit.
- Look at multiple comparison sites, since some sites only list cards from certain issuers.
Check the annual fee.Some credit cards charge an annual fee just for the pleasure of using the card. However, other credit cards won’t charge an annual fee.There’s rarely a reason to get a card with an annual fee unless that’s the only card you qualify for.
- Sometimes, a credit card will have extra perks that make the annual fee worthwhile, such as double rewards.Unfortunately, double rewards are rare if you have bad credit.
Research the rewards rate.Secured cards rarely offer rewards, but some might. For example, the Discover it Secured Card offers a 1% reward rate.This means that for every 0 you spend, you’ll earn back .
- Check the details of any rewards program. For example, some cards only offer rewards for purchases of certain products (such as gas) or purchases at certain stores.
- The methods of reimbursement can also differ. Some cards let you reimburse your points for gift cards or for cash. Others will let you apply your points to your balance.
Check the APR.Your APR is the amount of interest you will be charged for carrying a balance. The credit card issuer will set the APR based on your credit score and the type of credit card. Cards with rewards generally have higher APRs.
- You can check the APR at the issuer’s website. It might also be listed at the comparison site you use.
Confirm the issuer reports to the credit reporting bureaus.Your goal might be to slowly increase your credit score. Accordingly, make sure the card issuer reports your payment history to the national credit reporting bureaus. A history of timely payments will increase your score and open the doors to more credit.
Identify whether the card is secured or unsecured.Most cards for people with bad credit will be secured. However, a few issuers offer unsecured cards to those with poor credit. For example, Credit One Bank Unsecured Platinum Visa is one unsecured option.
- Also check how the card is secured. Some issuers require that you have a checking account with them. Your checking account acts as security for your credit card.
- Whether secured or unsecured, you can expect the credit limit to be low. Because you have bad credit, the issuer won’t trust you to run up big charges.
Apply for the card.There should be a link at the comparison site which will take you directly to the credit card issuers application. Provide all information requested and double-check it for accuracy. If you are approved, then review the terms and conditions.
Increasing Your Credit Score
Use the card.Don’t get a credit card and then leave it in your purse. You should make at least one or two small charges on the card every month.Make sure you have enough cash to pay off the charged amount in full at the end of the month.
Keep your balances low.High balances can hurt your credit score, so make sure not to rack up charges on your new credit card. If you have other cards with balances, then work to get them paid down as soon as possible.
- There are many legitimate credit counselors who can help you develop a budget and pay down debt. Find them at your nearest university, credit union, or housing authority.
- A credit counselor can negotiate with your creditors to get late penalties or fees waived. They might also get a lower interest rate.
Pay off the balance in full each month.If you carry a balance, then you’ll have to pay interest, which will increase your debt load. Paying off in full will help increase your credit score.
- Also make timely payments. Payments that are even a few days late can hurt your credit score.Accordingly, set up payment reminders so that you are on time. Many credit card issuers offer text or email reminders.
Avoid “quick fix” credit repair companies.Many companies claim they can fix your credit score. Unfortunately, there are no quick fixes, and the company is probably stealing your Social Security Number and selling it. Look for the following red flags:
- tells you not to contact the national credit reporting agencies
- encourages you to dispute information in your credit report that is accurate
- advises that you give false information when applying for credit cards
- insists on payment upfront
- promises you a “new credit identity”
Fix errors on your credit report.Obtain a free copy of your credit report and look to see that all information is accurate. Common mistakes include accounts that aren’t yours or accounts listed inaccurately as in default.Contact the credit reporting agency to dispute these mistakes.
Avoid applying for more cards.Whenever you apply for credit, the issuer will pull your credit report. This “hard pull” will lower your credit score. Accordingly, you need to avoid applying for more credit if you want to quickly increase your credit score.
Ask for an unsecured card.You can start with a secured credit card and then ask the issuer to transition you to an unsecured card. It usually takes about a year to build your credit up again. The issuer will review your payment history and your credit score to see if you qualify. After you transition, your security deposit will be refunded.
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Date: 16.12.2018, 05:27 / Views: 72184