If you have bad credit, then you need to find a secured card from a reputable bank that has a reasonable annual fee (or no annual fee). Fortunately, there are several of these products with an annual fee of under $50. Another important benefit is a card that offers email and text alerts to remind cardholders when their payment is due. Cardholders with bad credit can also benefit from having a credit card account at the same bank where they hold a checking or savings account. This allows you to see all your accounts in one place and makes it easier to make a payment from one account to another.
The hardest part about applying for a credit card when you have bad credit is being approved. First, you need to check your credit score to see how bad your credit actually is. Those with the lowest credit scores may need to apply for a secured card to avoid being denied by a standard credit card. A secured card requires a cash deposit from the cardholder to “secure” the line of credit. Even if you have bad credit, you should still avoid applying for a card with extremely poor rates and terms. For example, applicants should avoid any card that does not offer an interest-free grace period, has very high interest rates, or one that has expensive fees that are billed monthly. Since there are several secured credit cards issued by reputable banks, there is no reason to open an extremely uncompetitive card.
If you have bad credit, then you should avoid applying for multiple credit cards. Instead, you should be focused on rebuilding your credit history and your credit scores by making all of your payments on time, keeping balances below the credit limits, and staying out of debt. Managing multiple accounts can make it harder for you to reach that goal. Once you have been using a secured card and paying your bills on time, keeping your balances below your limits and staying out of debt for at least a year, then it might make sense for you to apply for a second, unsecured card. Even then, it is important to maintain a conservative strategy of limited, responsible credit card use as your credit scores recover. Only once your credit score can be considered average or good, will it be time to consider having different cards for different uses.
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