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Sometimes, despite your best efforts, life happens and your credit score takes a hit.
Maybe it’s because of a medical emergency that sets you back and makes you unable to work for a period of time; or maybe you lost your job, got a divorce, or had some other life event that knocked your credit off track.
It could even be something good, like going back to college. The point is, when you need to rebuild your credit, getting a credit card for bad credit is an important part of that process.
Because even responsible people sometimes have credit problems, the credit card companies offer credit cards to help you recover from bad credit.
Known as secured credit cards, these cards are “secured” by the amount of money you deposit. So if you deposit $300, your card’s credit limit will be $300.
Why do I need a credit card to help rebuild my credit?
It seems like a catch-22: You need credit cards to help you build credit and prove that you can be responsible with it, but you can’t get them without already having credit accounts.
For that reason, you need to find the right credit card that can be the first step in your journey back to a healthy credit score.
Beyond that, there are some things that are very difficult to do without having a credit card.
For instance, many car rental companies and hotels require an actual credit card — not a debit card or a prepaid card — in order to make your reservation.
Most credit cards for bad credit can be used to make these reservations, although you need to make sure the hold that the company puts on your card does not exceed the credit limit.
How are cards for bad credit like normal credit cards?
You can use your secured card as you would a regular credit card.
As long as you make timely payments and stay within the credit limit, your initial deposit may be returned and the credit limit may be raised.
You might be evaluated from time to time to see if you qualify for an unsecured, higher line of credit. Some secured credit cards even come with cash back rewards.
With time and responsible usage, you can eventually work your way back up to regular credit cards with attractive interest rates, rewards and other benefits.
Are secured credit cards the only cards available for people with bad credit?
Secured credit cards are some of the most common cards for bad credit, but there may be many other options that you can qualify for as you work your way back up to a good or excellent credit score.
Look through our selection of credit cards for bad credit here on CreditShout, and you’ll see both secured and unsecured card options.
Our format makes it very easy to go through the cards, find the features you want and apply instantly.
The right credit card can help you work your way back from the brink of bad credit, but it’s only part of the puzzle.
If you want to rebuild your credit history in a healthy way, you have to make payments on time each month — using Autopay options can help with this.
Keep your balance low or paid off, and very soon you’ll be able to qualify for whatever credit card or other credit product you need!