Credit Cards for Bad Credit 2015: The Underdog’s Rundown

More Americans find themselves recovering from negative marks on their credit report than in years past. Job loss, health crisis, and domestic changes are just a few events that may lead individuals to fall behind on paying bills. Nevertheless, people who have bad credit should not feel discouraged. There are several types of credit cards that are attainable for consumer who may have multiple derogatories or an otherwise low credit rating. These credit cards can be used to repair and rebuild credit over time.

Store Cards
Department and specialty stores often offer credit accounts that have lower credit approval criteria than other major cards that can be used to make general purchases. Store cards also usually offer a new customer bonus that can be used against purchases when opening a new account as well as periodic discounts and customer appreciation deals.

The Macy’s store card is among the oldest and most popular. Advantages to having a Macy’s card include access to special card holder sales events, a 20 percent new account bonuses, and the ability to combine the card with other discounts and sales the department store frequently offers. The Kohl’s card also offers a 20 percent discount that is applied to the members next purchase upon opening an account. New account holders also receive a coupon for 15 percent off as well as access to special sales and discounts throughout the year. Best Buy offers the Reward Zone credit card, which is essentially a traditional credit card that can also be combined with the store’s rewards program. Card holders may earn reward points with each Best Buy purchase. Applicants should note that while other store cards can only be used to shop at the store that issued the card and have no annual fee, the Reward Zone credit card has an annual fee, but can be use anywhere traditional credit cards are accepted. Store cards tend to have much higher APRs; therefore, an important rule of thumb when using a store account to build credit is to pay the balance in full prior to the end of each statement period.

Gas Cards
People who need to rebuild their credit and frequently stop at gas stations should consider brand-specific gas cards. These cards can be used at specific gas stations for gasoline and other purchases. As a perk, members are typically awarded discounts on gas when the use their card. Chevron, Texaco, and Shell are examples of gas station brands that issue credit cards. Like store cards, these credit accounts also have less stringent approval requirements. For best results, gas card holders should limit use to small purchases and pay the balance in full before interest charges are added.

Credit One Visa
Credit One has gained a reputation for issuing unsecured cards to people who are serious about rebuilding their credit. People with FICO scores in the low to mid 500s have been successful in applying for a Credit One Visa. The card’s biggest drawbacks are is fees. As with most cards that are intended for people with lower credit scores, the Credit One Visa has an APR that is higher than average. Card users may also be required to pay a fee for periodic credit line increases and a separate fee if they wish to have a second card issued. The Credit One Visa also has an annual fee that my be paid in monthly installments.

Whether using a gas card, department store account, or a traditional card like Credit One, managing credit responsibly is critical for consumers who would like to improve their credit score. By making all payments on time and avoiding carrying a balance, most card holders will see their scores improve. As scores rise, individuals who struggle with poor credit will find themselves moving into higher score ranges and qualifying to apply for cards with better rates, better rewards, and fewer restrictions. Individuals should avoid applying for multiple cards at once as doing so is likely to have a negative impact on their improving credit score.