Get the best credit card for your credit score
Different cards for different people
When you apply for credit card, the first thing you need to realize is that there is no one card that is universally good.
Different credit card deals suit different people depending on their financial needs.
Your credit rating is also a significant factor that should be taken into consideration when you apply for credit card.
The best credit card for people with no credit history is quite different from the best credit card for bad credit scores or even the best credit card for low credit scores.
Of course, having an excellent credit score puts you in an advantageous position of having the top credit cards to choose from but even then, you have to make sure that you are picking the right one for your needs.
The First Thing You Need To Apply For Credit Card
Whenever you put in a credit card application and the lender looks at your credit report, it gets recorded on your credit history.
This means if you just send out multiple applications randomly to several lenders, you rack up the impressions on your record.
To several credit card issuers, this sounds like you are desperate and they will be reluctant to approve your application.
Worse still, if you get rejected, it could harm your credit rating.
To avoid setting off on this course of self-destruction, it is important to first know your credit rating and then apply for credit card very to only a select few companies where your chances of approval are high.
Quick jump :
1. Best Credit Card For People With No Credit : To Build Credit
For students or new immigrants who do not have any credit history, the main aim is to begin to build credit.
Credit history is one of the primary factors that credit card companies consider when approving an applicant.
Getting approved for your first credit card can be difficult as financial institutions have no way to gauge your ability to repay loans or to pay bills on time.
Fortunately, it is not impossible.
If you are a student…
If you are enrolled in college, you have a good chance of getting approved for a student credit card.
These cards are meant for college students who may not have a large income or credit history.
Choose carefully- some student credit cards have high annual fees and interest rates, which make them a bad option for a first credit card.
Look for one that makes it easy for you to build good credit and choose just one.
If You Are Not A Student, Get A Job
Earning a steady income will put you in a better position to get approved for your first credit card.
Before they approve you, credit card issuers have to make sure you have the means to repay the credit card balance with your own money –your parents’ or spouse’s income does not qualify you for a credit card.
Apply At Your Bank
If you have been responsible with your checking or savings account, your bank is a good place to apply for credit cards for people with no credit history.
Visiting the bank branch is better than applying online as it puts you face to face with a bank official who may have more authority to get your application approved.
Get A Retail Or Department Store Card
While retail and department store cards have interest rates and are limited in that you can only use them in that particular store, they can help you build up a good enough credit history so it is easier for you to apply for a major credit card in the future.
Apply for a Prepaid Card
The easiest way to build credit and enjoy the benefits of a credit card is to apply for a prepaid card.
You do not require credit history to apply for a prepaid card and it can be used just like a regular credit card.
Moreover, you do not have to worry about exceeding your credit limit or late fees.
With prepaid cards you will find you have two options to choose from.
Some cards require no activation or overdraft fees but because they do not report your credit to any major credit bureau, they may not help you build credit history, which is your mail goal.
Other cards, charge you a fee for activation, but by reporting your credit, they help you build that all-important credit history.
Apply For A Secured Credit Card
The only criterion for applying for a secured credit card is that you have to make a deposit against the credit limit of the account.
The bank holds the deposit just in case you don’t make your payments as agreed.
As long as you’ve been making your payments on time, most issuers will agree to convert this secured card to an unsecured one.
Best of all, there’s nothing on your credit report to indicate you have a secured credit card so it won’t hurt your chances at getting other credit cards.
Make sure you pick one that has low fees and reports to the major credit bureaus.
A Few General Tips For Applying With No Credit
Applying only to those cards that target ‘moderate’ or ‘limited’ credit will improve your chances of getting approved.
Proceed cautiously when applying for any credit card that guarantees approval without checking credit score.
These usually have a catch, which could be in the form of high interest rate or high fees or both.
Applying to the cards in our guides can save you from these troubles.
Don’t let a few denials discourage you.
It is only expected when applying for credit cards for no credit history
Persistence, research and patience are the key to getting approved for your first credit card.
2. Best Credit Card For People With Bad Credit : To Stop Bad Credit And To Rebuild Credit
If you have a poor credit rating, it could be due to a combination of one or several reasons.
It could be that you have been late with loan repayments or missed payments in the past, you’ve filed for bankruptcy or because you are not on the electoral roll.
If you have bad credit, you are sure to find it very difficult to get a new credit card. Because all banks consider people with bad credit to be high risk customers, they are usually more hesitant to approve their credit card application and even when they do, credit cards for bad credit tend to have much higher annual fees and annual percentage rates (APRs).
So what do you do when you are rejected?
Most people who get rejected go on an applying spree and apply to every card company they can think of.
That’s the first mistake.
Right after your first rejection itself, you should resist the temptation to apply elsewhere and instead check your credit history to determine what the problem is. If your bad credit rating is justified, you need to rethink your strategy and only consider applying for credit cards to rebuild credit. The problem with sending out multiple applications and getting them all rejected is that all of the rejections get recorded and your credit rating will suffer even more. The best thing to do if you have a bad credit rating is to apply for a credit card to rebuild credit.
What Are Credit Cards to Rebuild Credit?
Credit building credit cards or credit cards to rebuild credit are cards that are designed to give you the convenience of some amount of credit along with the opportunity to rebuild your credit rating. However, all types of credit cards to rebuild credit will usually hold you to some very tight restrictions and limitations to ensure that you are not tempted to go on spending recklessly. These cards encourage responsible borrowing, which will help you improve your credit score and an improved credit score will eventually allow you to take out loans and get a better credit card in the future.
You have to keep in mind though that just because a bank has approved and given you a credit card to rebuild credit, you will not automatically build, rebuild or reestablish your credit history. To do that will take some time and a lot of effort on your part. The key to rebuilding your credit history lies in keeping your account balances low in relation to the credit limit and making on-time minimum payments to all of your creditors. Doing this over a period of time, will help you improve your credit score and bounce back from your bad credit rating.
Types Of Credit Cards To Rebuild Credit
When you start applying for a credit card for credit rebuilding it’s tempting to want to sign for the first one that gets approved. However, you should know that there are several different types of credit cards to rebuild credit available so before you jump in and select a card that could end up hurting you even more, it is a good idea to compare the different credit rebuilding credit cards and choose one that won’t lead you into any more debt and will actually help you rebuild your credit score.
There are essentially two types of credit rebuilding credit cards that you can choose from:
- Bad credit secured credit cards
- Bad credit unsecured credit cards
Secured Credit Card: An Effective Solution
Secured credit cards are designed specifically for people with a bad credit history and as such, they are typically more easily approved. Once you’ve been approved, you will have to pay a deposit on the card. The size of the deposit will determine the amount of credit that you get but that too differs from one card to another. Some cards allow you to borrow up to 100% of the amount that is deposited, whereas others allow you to use only a certain, pre-determined percentage of the amount deposited.
Secured credit cards tend to have higher annual fees and higher APRs. What you need to be careful about when applying for a secured credit card is that you do not sign up for one that hurts you more than it helps. If you apply for a secured credit card that has very high fees, you could end up spending so much money on fees, you won’t be able to borrow anything.
A lot of people reject the idea of applying for a secured credit card because it involves making a security deposit against the credit limit and nobody wants to do that.
However, a secured credit card that reports to major bureaus offers you a practical and realistic way to set your credit history right and is far better than having no credit card at all.
After a year of on-time payments, most secured credit cards can be converted to unsecured cards, which is something you should definitely be aiming for.
The minimum security deposit for a secured credit card is about $300.
If you’re wondering where you are going to get the money, it’s not difficult.
If you simply put aside $50 every month, you will have collected the amount you need.
The benefit of getting a secured credit card is that these can be very good credit cards to rebuild credit and if you can keep up with your payments for a whole year, you will qualify for an unsecured credit card.
Unsecured Credit Cards
Unsecured credit cards are more like standard credit cards.
Many people with bad credit prefer to get an unsecured credit card instead of a secured credit card when they can get approval. This is because you are not required to put down any deposit to apply for unsecured cards and as you keep up with your payments, your credit score will keep improving.
However, an unsecured credit card for bad credit can be very expensive, sometimes even more expensive than a secured credit card.
Though these cards have higher interest rates, they could still work in your favor if you use them wisely and pay off the bill in full every month. These cards make great credit cards to rebuild credit and you should see consistent improvements in your credit history as you continue spending modestly and paying in full.
Whether you are successful in obtaining a credit rebuilder credit card or a secured credit card, it is absolutely crucial that going forward, you strictly repay your bills in full every single month.
Don’t delay or default on even a single payment so you avoid paying any interest costs.
Borrowing new debt on any of these cards can be frightfully expensive and will send your credit crashing downwards. That is something you want to avoid at all costs.
Using your cards wisely– spending only a little and paying it off in full every month for at least 6 to 12 months, can help you clean up your smudged credit history and put you in the running for a better credit card.
Prepaid Credit Cards
If you don’t succeed in applying for a secured or an unsecured credit card, you can apply for a prepaid credit card.
But, as they do not report your credit to any major credit bureau, they may not help you build credit history
3. Best Credit Card For People With Fair/Low Credit
Having a fair/low credit record puts you right in between the two extremes of bad and excellent credit and you will yourself in a gray area with many credit card issuers.
You may not find it all that difficult to apply for credit card with a low credit score. However, you may not find it so easy to get approved for the card of your choice.
The good news is with some careful thought and persistent efforts at improving your credit score you will be rewarded with a wider choice in the not too distant future.
4. Best Credit Card For People With Good/Excellent Credit
If you’ve got an excellent credit score, life’s a party for you and you deserve it. It’s the reward for years of diligence and prompt repayments.
Apply for credit card with a 0% introductory period and which offers you features and rewards that you are likely to make sure of.