Nowadays, obtaining a credit card is complicated for those with low scores in financial history. Don´t you have good scores? Don’t worry! For you, there are also credit card options that can help you raise your score. Stay with us and keep reading this post.
About credit score: What is it?
It is the financial score that represents your credit history. Within this three-digit number, the banking entities evaluate your behavior towards debts, transactions, and savings, financially speaking.
Believe it or not, this score determines if you are an excellent candidate to obtain a bank loan, mortgage, or credit card, in addition to the possibility of extending the amount of any of the above.
Typically, your score will be between 300 (low) and 850 (high). As expected, a high score indicates no financial risk in offering you a banking product, so you will have a greater chance of obtaining loans at a low payment rate.
A low score will make it hard to get loans or credit cards, and you’ll likely have to pay high-interest rates if you find one. However, it will be these same loans that will help you raise your credit score.
How to increase my credit score?
- Pay your debts on time. Paying your bills makes up 35% of your score, so they require attention. Also, overdue payments affect your score for seven years!
- Low credit usage rate. Try to keep your credit rate in use below 30%. For example: If your credit card has a limit of $20,000, then the balance in use must be $6,000.
- Keep your old credit cards active. No matter how old they are and if you no longer use them, closing your credit accounts affects your credit score since they decrease your accounts’ age. Remember, the longer your credit history, the higher your score.
- Managing several loans. It can help you raise your score by 10%. However, it makes up a small part of your credit history, so if you want, you can skip this step and only have the necessary loans.
- Request and manage credits with moderation. If you get, for example, a credit card, try not to use it excessively. Of course, these products help improve your score, but they can also lower it if you don’t pay on time.
Five best credit cards for low score profiles
Now, we’ll show you the credit cards you can start with if you have a low score. Remember that the rock-bottom score is from 300 to 369. Let’s get started.
1. Indigo Platinum Mastercard
It is one of the best options for those who have a poor credit score or for users whose situation is bankrupt. This credit card has the following characteristics:
- Annual rate: $75 paying the first year. Later you will pay $99
- Annual interest rate: it is 24.99%
- Minimum score to obtain it: 350
- Foreign transaction fee: 1% per purchase
Also, when traveling, if you rent a vehicle with this credit card, you automatically obtain coverage in case of theft or damage. The obtaining process is straightforward and will not affect your credit score.
2. Green Dot Platinum Card
Suppose you are having trouble getting approval for other credit cards. It works as follows: the amount you deposit will be your credit limit. For example, if you deposit $10,000 as an initial amount, this will be your credit limit.
You must pay on time and use it responsibly so your low score can rise. Its characteristics are:
- Annual fee: $39
- Annual interest rate: 19.99%
- Minimum score to obtain it: it does not require.
3. Credit Builder Secured Visa
This option has an annual interest rate without an annual fee, and your initial deposit establishes the credit limit. Also, Armed Forces Bank can help you build a good credit history by reporting your financial behavior to three leading credit bureaus. Its characteristics are:
- Annual fee: $0
- Annual interest rate: 25.99%
- Minimum score to obtain it: 300.
4. OpenSky SecuredVisa
It is one of the most successful credit card options for those who do not want verification of their credit history. And, as if that were not enough, you do not need to have previous bank accounts to start, which means that you can build financial history from scratch. It requires a minimum deposit of $200 and its features are:
- Annual fee: $35
- Annual interest rate: 17.39%
- Minimum score to obtain it: 300.
5. DCU Visa Platinum Secured
It is a perfect credit card for those glancing for an economical solution. It does not have an annual fee. In addition, its interest rate is low compared to other credit cards, and it is flexible regarding the loan limit.
It includes other benefits, such as vehicle rental, which is perfect for trips and is ideal for paying your insurance installments. These are its characteristics:
• Annual fee: $0
• Annual interest rate: 11.50%
• Minimum score to obtain it: 300
Why use credit cards?
Having a credit card at your disposal is convenient due to its many advantages. Because not only can you get out of debt or financial trouble, but you also obtain other benefits by acquiring this type of product in your preferred bank.
As we have mentioned throughout this article, one of the most significant advantages of using credit cards is the possibility of increasing your credit score. Other benefits that these banking products can offer are:
- Build your credit history.
- Save on interest.
- Make purchases online.
- Get discounts for purchases.
- Possibility of opting for loans without interest.
In short, credit cards are an excellent option for our economy. However, remember to use it sparingly and keep up with payments to prevent this from affecting your credit score.
