What are low credit scores
What Are the Best Credit Cards for Low Credit Scores?
November 15th, 2013 | Author: Stephanie
[I]f your credit score is below 650, your chances of getting a credit card are pretty slim. Dozens of companies used to serve the “sub prime” market. But federal credit card reform laws along with a challenged economy have made it much more difficult for people to successfully find the best credit cards for low credit scores. The good news is that even if you have a low credit rating you still probably have a chance of obtaining at least one of the best credit cards for poor credit scores.
Though this company now markets more to people with higher credit ratings, Capital One remains a major provider of the best credit cards for low credit scores. This provider of both credit cards and auto loans offers several types of MasterCard accounts with people needing to establish or re-establish a good credit rating. As of 2013, the annual interest rate for Capital One “rebuilding” cards was 22.9 percent. The account also incurs a $29 annual membership fee.
Your credit score will determine whether you must make a
$49, $99, or $200 security deposit in order for Capital One to issue your account. The deposit is not the same as a bank account; you cannot withdraw the funds until you or a Capital One employee closes the account. The security deposit serves as collateral in the event you do not make your credit card payments as promised.
Another one of the best credit cards for low credit scores comes from USAA; you must have some type of current or past relationship with the military or have a close family member who qualifies for USAA membership. As of 2013, the annual interest rate was 9.9 percent and the yearly membership fee was $35. Some accounts require a security deposit.
To improve your future creditworthiness, adhere to the following tips once you acquire one of the best credit cards for poor credit scores.
- Charge no more than 50 percent of the available credit limit.
- Pay even $5 more than the minimum payment due each month.
- Do not get too many new accounts at once; this will decrease your credit score for at least 6 to 12 months.