Approval for a credit card and bad credit aren't two phrases that usually work out well together. Each lender, however, uses its own criteria when defining what score qualifies as bad credit. The good news is that there's still hope. You may employ either of a couple of options to obtain a credit card, even if you have extremely bad credit.
A FICO credit score is a three digit number. The score is based upon data found in your credit history. The lowest FICO score that a consumer can have is 300, and the highest is 850. The lower your score, the worse your credit. Fortunately, your credit score isn't permanently stuck at one place. It will change up or down as the information in your credit report changes.
If you have bad credit but want a credit card now, you won't qualify for a traditional credit card. That's where a secured card comes in handy. With a secured card, you make a deposit with a bank or credit union into a certificate of deposit or savings account. Your credit limit is generally equal to the amount of your deposit. You can use the credit card the same as you would an unsecured credit card. Some secured cards have an annual fee, but others do not. The best strategy is to shop around for the secured card with the most favorable terms.
Bad credit will prevent a traditional lender from issuing you a prime credit card -- one geared toward those with good or excellent credit. There are lenders, however, that specialize in issuing credit cards to subprime borrowers, which are borrowers whose credit scores are below 660. These cards do not require a security deposit. The downside is they come with annual fees and high interest rates. Some of these cards also charge a fee just for applying.
Many issuers of secured credit cards and subprime cards report to the credit bureau. If you use them correctly, they can help improve your score. The key is to use them wisely by making all the payments in a timely manner and keeping the balances low. Eventually your score will improve. Once your credit score rises, you may be able to qualify for traditional cards that have better terms.