Credit cards are widely seen as one of the simplest types of credit to get. They are often recommended to people as a line of credit ideal to start building (or rebuilding) their credit record. A credit card can be a valuable tool for managing expenses as well as building your credit history. Many offer perks and rewards that could save you cash, too.
If you have an actively bad credit history, rather than no or limited credit history, applying for any type of credit will be tough. Even a credit card! However, there is some good news- you might be able to secure yourself a credit card despite that poor credit score. Today we will walk you through everything to know about applying for a credit card with bad credit, and how you can improve the situation.
Can I Get a Credit Card if my Credit Score is Low?
Facing a low credit score can be daunting, but it doesn’t necessarily mean you’re barred from accessing credit cards altogether. While traditional credit cards from major banks may pose challenges for those with less-than-stellar credit histories, there are alternative options designed specifically for people with bad credit like yourself. Additionally, even the biggest institutions will sometimes take a gamble on people with otherwise great applications, but a lower than average credit score. Sometimes it is worth taking that chance.
However, do remember that you should be applying for a new credit card for the right reasons. If you’re hoping for a tool to help you in your quest for better credit, it can be a smart move. As long as you have learned how to properly manage your credit, and are not going to simply sink into even more debt. If you’re looking for fast, easy cash, or want an excuse to go on a shopping spree, it’s a really bad move.
How to Apply for a Credit Card With Bad Credit
If you have bad credit and want to apply for a credit card, you will need to select your vendor very carefully. We looked at some credit cards that are (relatively) easy to qualify for below. Ensure you are otherwise the best possible match for the product regarding salary and other criteria.
It can help (but isn’t a guarantee) if you already bank with the institution in question. This means they can access your entire financial history and make a more thorough evaluation than just by your credit score.
There are also specialized credit cards available for individuals with lower credit scores, often with more lenient eligibility criteria. You could also see if the institution will allow someone you trust (like a family member) to cosign with you. This means they will be forced to take on your debt if you default, so be absolutely honest with the potential cosigner and make sure you really can afford the repayments.
If you’re working on improving your credit or need a credit card despite a less-than-ideal credit history, secured credit cards can also be a viable option. They are rarer in SA than in the US, but there are some. These cards need you to ‘prepay’ funds into the card to act as collateral and reduce the risk for the lender. Additionally, some lenders offer credit builder programs or starter credit cards tailored for individuals looking to establish or rebuild their credit profiles.
Of course, it would also be a smart idea to work on boosting your credit score, so you don’t find yourself in this predicament in the future.
What is the Minimum Credit Score for a Card?
The minimum credit score requirements you need will vary, depending on the issuer and the type of credit card. Remember, as this is unsecured lending, the lender has a lot of discretion about what they will accept. In South Africa, major banks typically prefer people with credit scores in the good to excellent range, which starts from 650 and above. They will often accept applications for low-balance or secured credit cards with lower scores, however. Think in the 610 range or so. This is highly dependent on the rest of your profile, such as your salary and other financial behavior.
What is the Easiest Credit Card to Get with a Low Score?
While no credit card is truly ‘easy’ to get with a low credit score, here are some that have slightly less stringent eligibility criteria:
- Capitec GlobalOne Credit Card
- Discovery Bank Gold Card
- African Bank Black Credit Card
- Absa Flexi-Core Credit Card
- FNB Aspire Credit Card
These are all entry-level products, which will only have small balances- but that’s enough to start rehabilitating your credit. Each bank will also want to see a specific salary range and other key facts, so evaluate them carefully and make sure you are the best possible match, poor credit history aside.
What Credit Card Companies Will Approve Me With Bad Credit?
If you have bad credit and don’t otherwise qualify for the products we’ve mentioned, your last hope will be to seek out a specialty lender focusing on the bad credit market. They may be able to help you find a credit card you will qualify for. Make sure they are a trusted and reputable, NCR-registered financial service provider.
It can be tough to access any credit, even credit cards, if you have bad credit. However, you do have some options open to you. Good luck!
