by A.W. Berry

Created on: September 03, 2010

Even if you have bad credit you may still be able to obtain a credit card. Several ways to obtain a credit card with bad credit exist, and if those don't work there are viable alternatives to credit cards that can allow you to apply and receive a credit card in a relatively short period of time.

• Instant approval credit cards

The obtaining instant approval credit cards is less dependent on credit scores because they require the balance on the card to be paid in advance. Several instant approval credit cards exist and include the 'GreenDot PrePaid Mastercard', and AccountNow Prepaid Visa Card among others.(

1)

• High interest credit cards

If a pre-paid credit card isn't what you're looking for a high interest card may be a reasonable short-term solution if you plan on paying off your purchases before expiration of your credit card's billing cycle i.e. on time. Establishing and paying high interest credit card credit can build credit score and warrant lower rates in the future.

• Secured credit cards

A classic way of obtaining a credit card with bad credit is the secured credit card, this ensures the creditor that no matter how bad you spend, an amount equivalent to the card's balance has been put aside to cover the cost of risk should the credit card holder fail to make payments on the credit card. As with regular payments on high interest credit cards, secured credit cards can help build credit toward obtaining a non-secure credit card.

• Single store credit cards

Retail outlets such as clothing distributors or automotive repaid companies may also issue credit to people with bad credit depending on their credit requirements.(2) A condition for more easily obtaining such credit cards may be higher fees and/or interest rates. This may be because sales made to people with bad credit can be sold to collection agencies for a fraction of the price at least yielding a partial revenue to the company printed on the credit card.

• Co-signed credit cards

Co-signed credit cards are similar to secured credit cards except they are secured by the credit of another person with presumably better credit, than with actual funds. This helps the lender guarantee payment of the balance should a problem occur with non-payment by the primary account holder. In such instance, the co-signer of the credit card loan is also responsible for the credit card balance so finding a willing co-signer may be just as difficult as obtaining a willing credit card lender for the same reason of bad credit.

If obtaining a credit card with bad credit is not achievable right away, several additional options exist that help build credit may also help you acquire a credit card in the near future. For example, some prepaid debit cards actually have a built in credit reporting program that helps the card's holder build credit score. After the program is complete, the issuing bank or other lenders may then be more willing to offer credit card to those with bad credit.

Sources:

1. http://bit.ly/bfRf8Z(Creditcard.com)
2. http://bit.ly/aHT1SC (Bankrate.com)

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