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Money doesn't make the world go round, but it sure does make life a lot easier when you have access to cash and credit. Having bad credit can be a setback, considering that a significant amount of purchases in life require the use of credit, either through a credit card or loans. While having bad credit is certainly not good, having no credit can almost be even worse. One of the best ways to build up your credit from no credit or bad credit is to use a credit card and make frequent, on-time payments. This builds a reputation that you can pay what you owe and pay it in a timely manner, showing lenders and credit bureaus that you can be trusted with larger lines of credit and, thereby, increasing your credit score. Getting a Credit Card with Bad Credit You might be wondering if you can still apply for a credit card with bad credit. There are plenty of banks that approve people for credit cards who have low credit scores. One of the common outcomes of having poor or bad credit is getting approved for a card with a very steep interest rate, or APR. In the world of credit, your interest rate goes up in relation to your credit score going down – only individuals with very good credit can expect rock-bottom APRs. Having a massive APR attached to a credit card because of your credit history might be painful, but if you take care not to overuse your card and keep the balance on it low, you can help repair your score faster and apply for a card with a lower APR after some time. It takes patience and discipline, but it is possible, and it's really the only way to repair bad credit and put you in a position to get a credit card with a better rate. If you have no credit history, things get a little trickier. In the eyes of most lenders, having no credit history may be worse than having bad credit. It means that financial institutions have absolutely no idea about your ability to make payments and repay loans. It can be extremely hard to get a credit card with no credit. However, there is one option that is often overlooked by people – secured credit cards. How Do Secured Credit Cards Work? Secured credit cards are a great way for people with no credit history or bad credit to establish and start building credit. A secured credit card is basically a credit card with a security deposit attached. The deposit is equal to the limit on the card. Monthly billing statements are sent to the cardholder just as there would be with a standard credit card. Most include interest rates and annual fees. The more you use the card and pay the bills on time, the faster you will establish credit. Some people might be turned off by the fact that they have to pay interest on a secured credit card. That's why it's important not to overuse a secured card and make the payments on time. If you end up getting a secured credit card, start sending out applications for standard cards after a few months. Eventually, once you've been given a credit score you'll be approved and you can cancel your secured card and get your deposit back. While having a debit card with a security deposit and an APR may not sound appealing, secured cards are some of the top credit cards for people with bad credit. Get Your Credit on the Right Track Whether you have to get a secured card or a high-APR credit card due to your bad credit history, the only thing to do is to start working your way up the credit ladder. If you have no credit, look for a secured card that requires a minimal deposit like $500. Use it on a regular basis on a small expense – a cable bill, for example – and keep paying those bills every month. You'll be surprised how quickly your credit score will climb and before you know it you'll be on to better cards. Amy Johnson is an active blogger who is fond of writing articles on Bad Credit Loans and advising people to get mortgage even with bad credit. Follow her on Twitter to know more on how to get secured credit card.
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