What Store Credit Cards Are Easy To Get With Bad Credit?
Credit cards can be a good way to build your credit if you don’t already have any. The best store credit cards are sometimes easier to get than regular credit cards. They usually come with certain stipulations, but they can be a good way to be used to how credit cards work.
If you have bad credit, it can be difficult to get approved for credit cards. You might have bad credit because you have a short credit history or because you’ve missed payments before. If you want an easy place to start, there are a few options for store cards that are easy to get.
What is Considered Bad Credit?
Anything below a 669 on the FICO score range is considered to be fair. If the score is between 300 and 579 it is considered a poor credit score. This means that you might have to pay a fee to apply for a card and it will be very difficult to get approved.
Many things affect your credit score, the first of which is your payment history. This makes up about 35% of your entire score. If you miss any payments, this will lower your score. The longer you wait to pay a missed payment, the worse your score can get.
Your score is also dependent upon your total available credit. This means that your score can tell lenders how much money you have available that you aren’t currently using, giving them a peek into your spending habits.
Having bad credit can affect your financial freedom in many ways. You will have to deal with higher interest rates and you might get denied more frequently by lenders. You might also have trouble getting a mortgage or an apartment down the line.
If you have bad credit, don’t worry! There are a lot of things you can do to help bring your score up, and there are many store credit cards for poor credit.
How To Improve Your Credit
The first thing you should do to improve your credit is evaluate where you stand. Look at your full credit report and see what it says. You want to look at the places where your score was affected negatively. This could be collections, too many inquiries, or missed payments. If you see any inaccurate information, you should dispute it right away.
The next thing you can do is make sure that you pay your bills on time. Set reminders and write down your bill schedule so you never miss a payment. If possible, set up auto-pay on accounts that offer it. If not, try to pay your bills a few days early so they have time to process them before the due date.
Try to reduce your credit utilization. This means paying off your current cards so that you have more available. Also, even after you pay off your credit card, don’t close the account. This could negatively impact your score since it reduces the number of accounts you have while reducing your available credit.
You can also try applying for a credit builder loan. This kind of personal loan usually offers a low-interest rate and helps you either consolidate debt or make large purchases. However, this kind of loan will require a security deposit when you apply for it.
Factors To Consider Before Getting A Store Card
Before you sign up for a store credit card, you should think about a couple of things. First, you should ask what fees are associated with the card you are considering. Some cards have an annual fee just for having the card.
You should also find out what benefits are associated with the card. This might be discounts on certain purchases or cashback offers.
Another important factor to think about is closed-loop versus open-loop cards. You need to understand what the difference is before signing up for a store card. An open-loop card can be used anywhere, whereas a closed-loop card can only be used at that store for purchases made there exclusively.
Closed-loop cards are usually easier to obtain for people with bad credit. This is because there is less risk involved. But open-loop cards sometimes have better rewards options.
When you apply for a store card, it often requires a hard inquiry on your credit. This will be added to your credit report and it can lower your score whether you’re approved or not.
Store Cards To Get with Bad Credit
These are some of the easiest store cards to get with bad credit. Keep in mind that results may vary based on your own financial history. Just because these cards accept people with bad credit in general, doesn’t mean you can get one automatically. There are a lot of other reasons a credit company might reject you, such as a bankruptcy or a lot of outstanding loans.
Target RED Card
This card offers 5% off certain purchases at Target in store or online. You can also receive other deals and discounts with this card. There is no annual fee for this card but this is a closed-loop card that can only be used at Target.
Amazon Credit Card
This card is from Amazon but it can be used anywhere. There is no annual fee and you can get 3%-5% off Amazon purchases. You can also get 2% cash back at restaurants and gas stations. It does not have a 0% intro APR period though like a lot of other store cards. If you want a closed-loop alternative, you can also look at the Amazon Store Card.
This is another closed-loop card for JCPenney only. You can earn points for purchases when you use this card and you can also claim rewards. There is no annual fee but this card does tend to have a high APR. You’ll also get 15% off your first purchase.
Walmart Rewards Credit Card
The Walmart Rewards Card is from Capital One and they offer up to 5% cashback at Walmart in store or online. There is no annual fee and you can receive 2% cashback at gas stations. You can also redeem rewards on your purchases while checking out. This is an open-loop card but if you have extremely bad credit, you may want to try the Walmart Store Card instead.
Plan On Paying Store Cards Off Sooner Rather Than Later
If you decide to apply for one of these cards, you should use it responsibly. Make sure that you keep track of how much you are spending each month and pay your balance off each month.
Don’t let your debt pile up on this card because it will only make your credit worse. Keep track of the fees that the card is charging you. This includes an annual fee or a fee to get a cash advance. You also don’t want your credit utilization ratio to be extremely high because of this card. Don’t let your utilization get above 30%.
Store Credit Cards vs. Regular Credit Cards
Sometimes it is easier to get a store credit card than a regular credit card. This could be because they are closed-loop or they have a low credit limit. If you are unable to get a regular credit card because of your credit, you can try to get a store credit card if you are in need of making an important purchase or need to build your credit.
Even if you can only use it in the store, making on-time payments can increase your credit score and lead to you being accepted by other lenders.
Regular credit cards usually offer some kind of rewards but it isn’t usually for a specific store. If you want to take advantage of a high percentage of cashback from one particular place, then a store credit card could be best for you.
Both types of credit cards can lead to overspending if you aren’t careful. Never spend more money than you can afford on a store credit card because their interest rates and fees are likely higher than a regular credit card.
Bad credit isn’t the end of the road if you’re looking for a store credit card, but bad-credit store cards often have high rates and hidden fees in the fine print for those desperate to open an account.
Bad credit can be a huge issue for a lot of people. You just have to work and focus on paying your bills on time and paying off your debt. It may just be about building credit history too. This is why store credit cards can help people with little to no credit history. Make sure you do enough research before signing up for a store card on the spot — a one-time 20% off discount isn’t usually worth high interest rates and a hit to your credit score anyway.