Apoor credit history credit card can be a useful tool to help rebuild or repair your credit. These cards are designed with credit-building as their main objective and can give you access to a credit line, which can be used responsibly and reported to the credit bureaus over time.
Low or no annual fees and rewards without restrictions are key features to look for. Some cards even offer the opportunity to build your credit with regular reporting to the three major credit bureaus and a higher credit limit after demonstrating responsible card usage.
Secured credit cards are available for people with poor credit and require a security deposit that can be refunded as long as the account is used responsibly. They may also carry a lower rate and fee than unsecured credit cards for bad credit.
The Top Mistakes to Avoid When Using a Credit Card for Poor Credit
Paying your balance in full every month can help you improve your credit utilization ratio, which is how much of your available credit line you’re using. The credit bureaus use this information when calculating your credit score, and a high balance means you’re using a lot of your available credit.
Some credit cards for poor credit don’t carry any fees or penalties, but those with a significant fee or penalty APR should be avoided at all costs. Some of these fees can be hidden or hard to track, so it’s important to read the fine print closely and understand what you’re paying for.