Reasons You Should Apply for a Credit Card With Bad Credit


There are quite a few reasons why it is judicious to apply for a credit card with bad credit, albeit with certain amount of caution. Those who have a bad credit history and hence a poor credit score, are seldom given good offers as far as credit cards are concerned. They tend to pay higher interest rates on their personal loans as well as their home mortgages. Besides, they also tend to get higher premiums for their auto and home insurance. It is therefore, imperative that one has to improve their credit score.

Why do you need to get out of bad credit?

You need to apply for a credit card with bad credit, to improve your credit score and undo the negative effects of a bad credit history. Here are some of the events that could have an adverse effect on your creditworthiness and credit score:

•    Bankruptcy

•    Defaulting on a loan repayment

•    Frequently missing payments on your bills including credit card bills and bills for utilities like telephone, internet, electricity and water before the due date

•    Paying penalties frequently for missing the due date on credit card bill payment or for exceeding the credit limit

•    High card debt to credit limit ratio, which means that you are using a large amount of your available credit


All these tend to cast a negative impact on your credit history, as a result of which your credit score goes down drastically. Here are some of the negative impacts of a bad credit history or a low credit score:

•    APR on available credit cards is significantly higher for those with bad credit. Moreover, a bad credit score means that when you apply for credit cards you are frequently rejected which further lowers your credit score. Similarly, loans too are not sanctioned easily for those with low credit and even when sanctioned, the rates tend to be way too high.

•    Credit cards from card issuers like Orchard Bank are still available when you apply for a credit card with bad credit. However, you need to be extra careful with APR in excess of 20% as you could incur high interests even with a low outstanding balance.

•    When you apply for a credit card with bad credit you need to be prepared to pay higher amount of fees along with hidden charges which could eat up a large amount of your available credit limit. This increases your credit utilization ratio thereby having an adverse effect on your credit score.

•    Even house owners and employers tend to refer to credit scores these days to check if a candidate is creditworthy and has a regular income to depend on.

•    On an average, those with bad credit pay a lot more in terms of insurance premiums, loan interests and credit card interests than those with excellent credit history.


How to apply for a credit card with bad credit?

It is a good idea to check online when you want to apply for credit cards available for bad credit. There are a lot of card issuers who have their own bad credit cards, such as Orchard Bank, Capital One and Walmart. Some of these are prepaid cards too, which are easier to procure largely because it doesn’t involve risk for the card issuers. First premier, Discover and Citi are some of the other credit card issuers who offer credit cards, although you cannot entirely be sure you will receive one when you apply for credit cards.

You can apply for bad credit, credit cards online by providing all your information. In fact, in some cases, you will receive the intimation almost immediately regarding whether your application has been approved, although you receive the actual card a few days later. These are called instant approval credit cards, which are usually provided to those who apply for a credit card with bad credit. If you have no credit, you can look online for credit cards with no credit check, which makes the process far easier and faster too.

Features of bad credit, prepaid and credit cards

A good reason to apply for a credit card with bad credit is to put your credit history back on track. You can do so by starting to pay your credit card and utility bill payments on time. There are credit cards which actually give you the opportunity to try and rectify the credit history. For example, there are bad credit, credit cards, which send regular reports to all 3 credit bureaus every month. You will also get special tools which will help you track your credit score constantly. So, by managing your finances and bill payments, you can actually motivate yourself by observing the improvement in credit scores over a period of time.

Some bad credit credit cards, actually give you a credit line of around $300 for a security deposit of only $90, which is ideal if you want a higher credit limit to operate with. A higher credit limit means that your outstanding balance to credit limit ratio is low and that augurs well for your credit score. Some cards like the Orchard Bank Visa cards even inform you regularly through text messages as well as email about due dates which helps you keep track of them and be consistently on time for your payments.

Bad credit, credit cards offer some rewards too, that include cash back and waiver of annual fee which will help you save some money on your expenses. Monthly expenditure reports will also help you inspect your expenses and see where you are overspending. Besides, some prepaid, cards allow you to make direct deposits and also receive payments from employers if required. The activation fee and issuance fee is also waived off on some credit cards, from reputed lenders, ensuring that your credit limit is substantial and you can improve your credit score, by repaying your outstanding balances on time. Thus, applying for a credit card and then managing your finances is one of the most effective ways to put your credit score back on track.

Aleena Josheph



Hello Friends,

This is Aleena Josheph an enthusiastic writer of US. She believes life is not a bed of roses. There are so many ups and downs and it is knowledge that gives power to face those challenges. Keeping the thing in mind, she is now trying to make her writing effective. Her goal is to make people aware about different top notch topics.

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