The major credit card institutions that offer the best interest rates and rewards won't touch someone with a poor credit history. If you have missed payments, gone over your credit limit, or racked up late fees and penalties, it is on your credit reports for the four main credit reporting bureaus. And, these reports are what credit card issuers use to determine who get credit and who does not.
There is hope if you have bad credit and now want to obtain a credit card. You can apply for what the industry calls a "bad credit credit card". Many credit card companies are now developing credit cards that are specifically designed for those with bad credit. These cards have high interest rates which ensure the credit card issuer is covered in case the credit card holder fails to make payments on time or pay the balance due. They also often have high annual fees.
These types of bad credit credit cards also tend to have start up fees, application fees, and other various fees. With all these "features" in place, offering credit cards to those with bad credit is really not that big of a risk for them. If the applicant pays their bill, they have acquired a good customer who has the potential to be a lifelong asset. If the person does not pay their balance, then the ridiculously high interest rates start accruing and then there are the late fees and penalties all of which make the credit card issuer money. So, it almost becomes a win-win situation for them.
With what seems all the odds stacked against the holder of a bad credit credit cards, it may seem that there is no hope for a person with bad credit. Yet, despite all the negatives, this type of credit card can help someone with bad credit rebuild their credit rating. If you use the card sparingly and pay the bills on time (and in full if possible), over time your credit history will take an upward turn. Often the issuers of these types of credit cards report your account activity on a monthly basis to the four major credit bureaus and this can have an almost immediate effect on your credit rating. These cards can be a good tool if your goal is to improve your credit.
If you are just looking to run up more debt, then these cards are just going to put you in a deeper hole. You will end up spending double or more in interest, fees, and penalties than the original price of your purchase.
Many of these bad credit credit card offers are found on the internet or arrive in the mail as "instant approval" offers. Actually, these offers are not instant approval because not every person who applies gets a credit card. They are more accurately instant answer offers—the answer being "yes" or "no". You provide the issuing company some preliminary information and they give you a decision anywhere from one minute to one hour.
Beyond a preliminary approval the credit card company will usually follow up with a more detailed application or phone interview. The financial institution offering the credit card may require the person to provide some form of references that will need to be verified. Once you have provided all the necessary information and references if you are approved you will still have to wait up to a week to receive your card in the mail.
When filling out an "instant approval" application for a credit card, there are some steps that can improve your chances of actually getting approved for a credit card. Be sure to fill in all the required fields of information. Being forthcoming with all your information not only speeds up the verification process, but shows an honesty on your part that could tip the scales ever so slightly in your favor. Remember, you cannot hide your bad credit—there are four credit bureaus out there that have all your information available for review. Just be honest, be thorough, and be persistent.
The approval may not be as instant as they advertise; but it is possible to get approved for a credit card. Then you are on your way to rebuilding your credit and hopefully climbing out of debt.
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