Whats the deal with Credit Cards for Bad Credit?
Every American has a credit score. This score depends on many different variables. When the score drops too low, this is known as bad credit.
You may wonder whether you can find credit cards for bad credit. Many lenders are hesitant to extend credit to those with bad credit.
If you want to rebuild your credit, credit cards can help. However, many fall into bad credit because of misusing credit cards. However, credit cards can also help rebuild bad credit.
What Is a Bad Credit Score?
The credit score scale extends from 300 to 850. 850 would be the highest possible credit score. Typically, “bad credit” refers to a credit score below 670.
If your credit score drops below 670, obtaining new credit is difficult. Credit between 580 and 670 is considered fairly bad. Anything below 579 is very bad.
What Leads to Bad Credit?
Bad credit refers to failure to repay debts. Paying bills late drops credit scores. Also defaulting on a loan drops it significantly.
You must undergo credit review whenever you apply for a new credit. Some examples of when your credit would be reviewed include:
- Applying for a new credit card.
- Financing a new vehicle purchase.
- Securing a mortgage.
- Applying for a lease.
- Applying for a personal loan.
- Applying for a business loan.
If you intend to apply for credit, your credit score is important. It may determine whether you qualify for credit or not. Your credit score can also influence your new credit terms.
Bad credit typically discourages lenders from extending credit. They will assume a borrower with bad credit is a high risk. If they cannot repay their debts, the lender stands to lose money.
Can You Get a Credit Card with Bad Credit? 
One of the best options to rebuild bad credit is credit cards. However, you must use credit cards for bad credit carefully. Misusing new cards will reduce the credit score even lower.
Maintaining a credit balance and paying on time builds credit. However, your new card may have strict terms because of bad credit. Always read terms and conditions carefully before signing up for credit cards.
How to Apply for a Credit Card with Bad Credit
Credit card companies often approve cards to those with bad credit. Some creditors offer cards specifically for rebuilding credit. However, borrowers must review their credit terms closely.
Most credit cards for bad credit are quite restrictive. These cards aim to help borrowers rebuild credit. This means they limit the possibility of credit dropping lower.
Credit cards for bad credit typically have monthly spending limits. Additionally, they have robust reminder systems to ensure payments are on time.
Benefits of credit cards for bad credit include:
- Gradually improving credit score.
- Encouraging healthier financial habits like budgeting.
- Robust reminder systems.
- Low annual fees.
- Cash back rewards or points rewards.
- Monthly reporting to credit bureaus.
- Secured credit cards can also help rebuild bad credit. These cards require security deposits that double as spending limits. You cannot spend more than you deposit into the account.
Credit Card for Bad Credit Students 
Students need flexible spending options. Many do not earn much income while attending classes. Credit cards for bad credit can be beneficial to many students.
Most credit cards designed for rebuilding credit are ideal for students. This makes it easier for students to manage repayment. Paying on time ensures a steady rebuilding of bad credit.
Students with bad credit can use these cards and rebuild credit. This can help them establish better credit by the time they graduate. Students should consider these options carefully when they have bad credit.
Cash-Back Credit Card for Bad Credit
Cash-back credit cards are popular throughout the US. These credit cards offer cash back for every purchase. There are three main types of cash-back credit cards:
- Flat-rate cash back offers a percentage of every purchase.
- Tiered cash back requires spending certain amounts to earn cash back.
- Category cash back pays higher percentages for specific purchases.
A cash-back credit card may help rebuild bad credit. For example, a category cash-back card for gas purchases rebuilds credit. This limits what the borrower spends and encourages timely payments.
Many credit cards for bad credit offer cash-back rewards. It’s possible to redeem this cash back in several ways. Some use cash back to lower their credit balance.
Should I Get Another Credit Card?
Bad credit can accumulate quickly if you’re not careful with spending. Using one credit card to pay off another isn’t a good idea. Adding another card may worsen your credit score.
However, it’s possible to use a new card to improve credit score. As long as you make payments on time, your credit will improve. You should pay down current cards before getting another one.
How Many Credit Cards Is Too Many? 
Having too many credit cards may hurt your credit score. Many lines of credit, even unused, makes you look risky to lenders. Five or more cards may be fine for building credit over time.
Some people have more than ten credit cards. Too few cards can hurt credit, but too many hurts it, too. If you have bad credit, think carefully before applying for new cards.
Rebuilding bad credit requires paying down debt. You must also make credit card payments on time. If you are already having trouble with this, new cards won’t help.
How Many Credit Cards Should a Person Have?
It’s difficult to say exactly how many credit cards one should have. Everyone has a unique financial situation. Using credit cards effectively may help improve bad credit.
If you have bad credit, review your options for new cards carefully. You may be able to refinance older cards with new cards. New credit cards may offer better terms and easier payments.
How Can I Fix My Credit?
The best way to fix bad credit is repaying debts on time. Create a budget and look at your payment due dates. Make sure you make all of these payments before their due dates.
You may want to consult a financial advisor. These professionals can review credit history and offer individualized advice. This could help you discover available options for rebuilding your credit.