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Can you get a secured credit card?

O

hen you apply for a credit card, your application may be rejected. This can hurt your chances of success in future applications.

Secured credit cards make rejection much less likely. But on the other hand, they are unlikely to be the best credit card offers available.

What is a secured credit card?

In fact, no lender offers 100% “guaranteed” credit card approval, but some will offer you a credit card with a much higher chance of being approved.

The reason it can do this is because it already has enough information about you to be reasonably sure that you will handle the card responsibly. This is why secured credit card offers tend to come from your bank or checking account provider. It already has insight into your income, expenses, and spending habits.

However, although the chances of applying for a secured credit card are much higher, you are still not guaranteed to be accepted. There are a number of eligibility boxes you’ll need to tick first – if you don’t pass them you could still be given the red light.

Why are credit card applications rejected?

There are many reasons why a credit card application may be rejected. First, the lender may consider that the level of debt you already have is too high.

He may feel that your income is too low or that your work history is unstable. This is important because he will want to know that you would be able to make your future repayments.

If you’ve never really borrowed money before, you won’t have a great credit history. This makes it difficult for a lender to judge how you have handled credit in the past and to predict how you might do so in the future.

Or it could be that your credit score is low due to missed payments in the past, or even county court judgments (CCJs) and bankruptcies.

Likewise, you may have just made several unsuccessful credit applications in a short period of time, which signaled to other lenders that you were having financial difficulties.

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How can I increase my chances of being accepted?

There are steps you can take before applying for a credit card that can increase your chances of being accepted.

  • Check your credit score. If you see a few recent credit rejections, wait a few weeks before reapplying. In the meantime, check for errors that could lower your score. If you find any, you can issue a correction notice to the credit reference agency to have them rectified.
  • Use an eligibility checker.This is a no-brainer as it will give you an idea of ​​your chances of being accepted without leaving a mark on your credit report.
  • Do not exceed: Keeping your “credit usage” (the percentage of your credit limit you’re using) on ​​other cards low will boost your score and reassure future lenders you apply with.

What other credit card options are available?

If you’re rejected because your credit history isn’t perfect, there are cards designed specifically for that purpose.

Wrong credit card, otherwise known as ‘credit builder credit cards‘, helping people with lower credit scores rebuild their reputation as borrowers. They tend to offer low credit limits so you can’t accumulate a lot of balance, but when used correctly and paid off in full, on time, they can boost your credit score.

The trade-off is that they carry much higher interest rates. That means they can get expensive if you don’t fully pay off your balance on time, and they can make a bad situation worse.

You can also opt for a prepaid card. Because you need to load a cash balance up front, these cards don’t require any credit checks. However, unlike credit cards, which fall under Article 75 of the Consumer Credit Act, prepaid cards offer no protection on your purchases.

Compare credit cards

Find the right card for you without affecting your credit score.

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