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Credit Card Q&A: The Best Credit Card for Someone with Bad Credit?

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Reader MailWhat is the best credit card for someone with bad credit? I’m finally out of credit card debt and now I want to improve my credit score. – Walter

Hi Walter,

Congratulations on getting out of debt! That’s a wonderful accomplishment. You are correct that getting the right credit card can help you boost your score. If you get a credit card and pay your bill in full every month – and on time – you will see your score improve. It will take some time, so just be patient. It’s important, of course, that you don’t get back into debt. But if you feel you’re ready for a credit card, here are a few suggestions for you.

An excellent card for rebuilding credit is the Orchard Bank Classic MasterCard®. When you apply for a card, Orchard Bank will determine if you qualify for a secured or an unsecured card. Don’t despair if you only get offered a secured card, which requires a deposit in a savings account to secure the card. This issuer reports to all three credit bureaus, so you can use the secured card to rebuild your credit history. And you even earn interest on your deposit.

The issuer has three other cards in the unsecured category. If you qualify for an unsecured card, you’ll be offered one of these. The APRs for the unsecured cards range from 14.90-19.90 percent. The APR for one of these cards can be high, so stay focused on paying your bill every month and boosting your credit score. Another downside of these cards is that the annual fee ranges from zero to $60 the first year, and after that, it ranges from $35-$59, based on your creditworthiness.

If you determine that a secured credit card is the way you’ll need to go, you might also consider the Citi® Secured MasterCard®. With this card, you deposit an amount ($200 to $5,000) into a Certificate of Deposit (CD). You earn interest on the CD and the issuer reports to the major credit bureaus so you’ll rebuild your credit history. After 18 months, you’ll be considered for the unsecured Citi® Platinum Select® MasterCard®.

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  • Beverly Blair Harzog

    Hey, thanks! Let me know if there’s a credit card question I can answer for you.

    • Elizabeth

      Hi Beverly,

      My mother cosigned a credit card purchase for the Shane Co for $5,ooo for me i was unable to keep up the payment due to losing my job. The account was sent to law firm and are willing to settle for $3,800. I read once the payment is past due it already affected both mine and my mothers credit score. My question to you is what would happen if i dont send the settlment?


      • Beverly Blair Harzog

        Hi Elizabeth–Since your mother co-signed for your credit card, she is also legally responsible for the debt. Your account has already been sold to a debt collector (the law firm) and the damage is done, so paying it off won’t do much for your credit scores. However, if you don’t pay it, you may be sued and that could create additional problems for both of you. Once you settle and pay the account, you and your mother can both start working on getting your credit scores back on track.

        One thing you didn’t mention is how old this account is. You should first check to see if it’s outside the statute of limitations. If so, you may be in a much better negotiating position to settle it for even less than they are offering.

        Hang in there! Let me know if you have any more questions.

  • Kelly Walker

    Most unsecured credit cards targeted at people with bad credit come with crazy high fees and interest rates. Your best bet is to get a secured card and make your payments on time for a year, then apply for a unsecured one with decent rates. You could also try to use a free consumer organization such as “Bad Credit MD” that helps people get back on track with credit.

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