How to Choose a Credit Card for Bad Credit

Orchard Bank is a popular choice for people who have bad credit.  Orchard bank will typically approve those who apply with FICO scores lower than 500.

For those who have extremely poor credit, or have gone through a bankruptcy they may be limited to a couple of other options:

1) Prepaid debit cards:  High fees, and won’t help you build or rebuild your credit as they don’t report to the credit bureaus. 

2) Secured Credit Cards:  While these cards will require you to post collateral upfront, usually in the form of a savings account.  These cards are usually the best way to rebuild your credit, although they do come with higher fees than other credit cards.

Good Credit Sense:

Beware of Fees

Prepaid debit cards and secured cards often have high annual fees, processing fees, and other hidden fees.  When you have bad credit, make sure you pay attention to the card agreement and terms.  Prepaid devit cards can charge for ATM withdrawals and even regular purchases.  Most secured cards have relatively high annual fees, so be aware that your first statement may already have a balance in the amount of the annual fee.  Orchard bank typically will dismiss the annual fee for the first year.

Avoid higher interest rates

Especially in these times, you may find that having bad credit makes you quite popular, especially with those looking to sell you expensive credit repair programs, or personal loans with aggressively high interest rates.   Keep in mind that there is rarely a quick fix to erasing your bad credit, and the best way is almost always through building a good credit history over time.