Best Travel Credit Cards: Top Picks for Every Explorer

Getting a credit card with bad credit can feel like a challenge. While some cards are marketed for those with poor credit, lenders still check everything closely. They want to ensure they pick people who are less likely to miss payments. Sometimes, the law requires them to gather specific details before approving a card.

For anyone aiming for a secured card, which means giving a cash deposit, or an unsecured card for less-than-perfect credit, certain things are needed. This includes having an ID number, address, proof of income, and a decent history with banks and credit issuers.

Key Takeaways

• Credit cards for bad credit still require careful review.
• Important information like income and credit history is checked.
• Meeting basic requirements can aid in getting approved.

A Unique ID, a Physical Location, and Other Personal Details

Credit Card Application Essentials

For anyone applying for a U.S. credit card, giving some basic personal information is a must. These details are needed partly because of rules set by the USA Patriot Act. This law is there to help stop threats like terrorism and to keep money matters clean.

Important Details Needed:

• Name
• Address
• Birthdate

Many can easily provide their name, where they live, and when they were born. It gets tricky if someone is new to the country. The Social Security number (SSN) spot can be confusing. For those without an SSN, there’s an option to get an individual taxpayer identification number (ITIN). Skipping these sections or being under 18 means the application won’t go through.

Earnings

When getting a credit card in the U.S., issuers look at how much money someone makes each year. This check ensures a person can repay what they owe. 

For those who are at least 21 years old, all income they can reasonably expect to access counts. This even includes what their partner makes.

Not all card types have strict income requirements. Secured cards, for example, might skip this step. Though, a few issuers consider monthly expenses and debt as well. 

For instance, Capital One’s Platinum Secured Credit Card requires an applicant’s monthly earnings to be at least $425 more than their housing costs, like rent or mortgage.

Unsecured credit cards usually have a clear income threshold. Often, a person needs to earn $10,000 to $12,000 each year to qualify. If they earn less or owe a lot in debts, their application could be turned down.

To help visualize this, here’s a simple list:

• Secured Credit Card: May not require a minimum income.
• Capital One Platinum Secured: Needs income exceeding rent/mortgage by $425.
• Unsecured Credit Card: Requires earning around $10,000-$12,000 yearly.

A Deposit for Security

Secured credit cards work a bit differently than regular ones. Instead of just applying and receiving a card, one needs to provide a cash deposit upfront. 

This is often at least $200 to $300. What they deposit typically matches their credit limit. 

So, if someone puts down $300, their spending cap would also be $300. 

If payments are missed, the card issuer keeps the deposit. When the cardholder closes the account in good standing or switches to a regular card, the deposit is refunded.

For those struggling to save enough for the deposit, it’s a good idea to look for secured cards with lower initial costs. 

It’s also worth checking out options that don’t require a deposit. 

Some companies, especially those targeting people with poor credit, offer unsecured cards. But, be alert: these often have hidden fees that can end up costing an extra $100 or more each year. 

It’s crucial to weigh the options carefully before making a choice.

A Place for Your Money

Checking and savings accounts are useful for safely keeping money. They also help in building an emergency fund. 

Sometimes, these accounts are needed to back the security deposit for a secured credit card. 

Issuers might also check these accounts to understand financial health. 

If opening an account is tough because of issues like a ChexSystems record, searching for a second-chance checking account at local banks or credit unions may be a good idea.

Building a Credit Story with No Major Issues

When applying for most credit cards, issuers usually perform credit checks. They’re looking to make sure there aren’t any big problems in a person’s financial history. 

For example, things like income and any past issues with money, such as bankruptcies or court judgments, can have an impact. 

It’s normal for large companies to consider these factors when deciding if someone is a safe risk.

To increase the chances of getting approved, individuals should focus on improving their credit. 

Catching up on missed payments is a good start. 

If someone has had a bankruptcy not too long ago, they might explore getting a card through their local bank or credit union.

Some credit cards don’t require a credit check, which might sound appealing. 

These options, though, often come with higher costs. So, while they are out there, they might not be the best choice in the long run.

A Spotless Record with the Lender

Sometimes old misunderstandings can affect whether someone gets approved for a credit card. If payments were missed with a certain bank before, it might mean new applications get turned down by them. 

Instead of focusing on past mistakes, it’s better to begin fresh with another bank. Many lenders welcome new customers. 

It’s a good idea to search for one that offers a fair opportunity to improve credit scores and build a positive history.