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How to Get Credit Card with Bad Credit: Your Ultimate Guide

Updated: Nov 5, 2023



Having bad credit can feel like a never-ending spiral.


It can impact your financial life in many ways, making it difficult to get a credit card, mortgage, or loan.


However, don't despair! Even with bad credit, there are options available for people to secure a credit card and start rebuilding their credit.


In this post, I'll guide you through the process and share some valuable tips to get you back on track.


Let's dive in!


Part 1: Understanding Bad Credit


1.1 What is Bad Credit?


Bad credit occurs when you have a low credit score or a history of negative financial events.


In Canada, credit scores range from 300 to 900, with a score below 560 considered bad.


Missed payments, high credit utilization, and bankruptcy are some common factors that contribute to bad credit.


1.2 How Bad Credit Affects Your Ability to Get a Credit Card


With bad credit, traditional banks and credit card companies might be hesitant to approve your application, as they perceive you as a higher risk.


However, that doesn't mean you're out of options. There are credit card providers that cater specifically to those with bad credit.



Part 2: Credit Card Options for Bad Credit


2.1 Secured Credit Cards



Secured credit cards are the most common option for people with bad credit.


These cards require a security deposit, which acts as collateral.


The credit limit is usually equal to or a percentage of the deposit. Some popular secured credit cards in Canada include:


2.2 Unsecured Credit Cards for Bad Credit

Unsecured credit cards don't require a security deposit but often come with higher interest rates and fees. They might also have lower credit limits. Some examples include:


2.3 Store Credit Cards

Store credit cards, issued by retailers, are easier to obtain but usually come with high interest rates and can only be used at specific stores. Examples include:


Part 3: Steps to Get a Credit Card with Bad Credit


3.1 Check Your Credit Score



Before applying, check your credit score using free services like Borrowell or Credit Karma.


This will give you an idea of where you stand and which credit cards are more likely to approve your application.


3.2 Apply for the Right Card


Research the credit cards available for people with poor credit and choose one that suits your needs.


Ensure you meet the eligibility criteria.


There's also the Fidem Mastercard which is designed for people trying to improve their credit which is definitely worth looking into.



Conclusion


Don't be discouraged if you have poor credit.


Many people go through it but come out stronger at the end.


Look into different credit card options and apply for a suitable card, stay on top of your payments and over time, your credit score will improve.


If you found this helpful, let me know in the comments.









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