Can I Get Approved For A Credit Card With A 500 Credit Score

A credit card is a payment card that allows you to buy goods and services, just like you can do with a debit card or prepaid card. You can get the card to borrow money from your issuer as long as you meet the requirements of getting a credit card. The cards differ from debit cards in that you have to borrow while debit cards allow you to spend your available balance, and if exhausted, you must recharge your account. This article will explain whether you can get a credit card with a 500 credit score. 

We have two types of credit cards. They include secured and unsecured credit cards. Secured credit cards allow you to deposit funds and borrow against your deposit. The more you deposit, the higher your borrowing limit. Usually, secured credit cards build credit either from a bad credit point or from scratch. On the other hand, unsecured credit cards require credit scores for you to get them. You can have a bad credit card or one for good scores. 

There are various requirements to get a credit card. One of them is that you must have at least 18 years. Moreover, you must have a checking account before getting the card. A checking account allows one to deposit money for their daily transaction needs. When applying for a checking account, your main aim is to keep the money close for your daily activities. 

How to get a credit card?

 If you need a credit card, you must first evaluate why you need the card. You might require one to build your scores, especially if you have a poor credit history, borrow money when in need, or restore your damaged credit scores. We have various secured credit cards for rebuilding credit that you can get today. Secondly, you should evaluate the available financial institutions issuing credit cards and know which one suits you. We have companies that offer good terms, while others have costly cards that may drain your finances. 

Once you identify the most suitable card, you can apply. Some institutions allow you to apply for your card online, while others require you to apply at a branch. Whichever the case, you end up with your card. When applying online, you must provide your physical address where your issuer will send the card to you. After receiving, you then activate to start using it. For secured credit cards, most issuers require you to pay for your card before getting it. 

As you wait for your card, the issuer provides you with a virtual card to purchase goods and services online. Once you receive and activate the physical card, your virtual card ceases to operate. 

What is the difference between a secured and secured credit card?

credit card with a 500 credit score

There are differences between the two types of credit cards. First, secured credit cards require a security deposit for you to get them, while unsecured ones require credit history. That is the main difference between secured and unsecured credit cards. Another difference is that the security deposit you provide for the secured one determines your limit, while credit scores determine the unsecured credit card borrowing limit. 

Moreover, you cannot get an unsecured credit card if you do not have a borrowing history. However, you can get a secured card whether you have a credit history or not. 

What are the factors to consider when applying for a credit card? 

There are various factors you should check when applying for a credit card. That ensures that you get the best card that suits your demands. To get the best cards, you should check on the following factors.

i) Monthly fees

Some issuers charge monthly fees for your card. However, we have issuers who do not charge any fees. If you get one, the better as you will save lots of money. Monthly fees can sum up to large amounts of money after a long period. 

ii) Annual fees

Some card issuers charge annual fees while others do not. Annual fees are usually significant figures, and you should always find a card that charges no annual fees. That way, you will avoid losing a lot of money. 

iii) Balance transfer rate 

You might be looking for a credit card to transfer your balance to pay your loan quickly. The best balance transfer credit cards for fair credit should give you a 0% APR for your balance transfers so that you can repay your debt within the shortest time possible. 

iv) Credit limit

If you are mainly applying for a card to borrow money other than building your credit, you will need one with a high limit. That way, you will have a large allowance every month. A card with a low borrowing limit will leave you still having nowhere to borrow from, which will also affect your scoring since you will have used too much of your line of credit. 

v) Rewards

It’s impressive to get rewards because of using our card. Some issuers give cash backs, miles, and points when using your card at particular outlets. Those are the cards you should consider. However, most of them require high credit scores, and thus most people might not qualify. 

vi) Interest rate

Since a credit card gives you a loan, it means that you must repay it with interest. We have various cards that charge low-interest rates, and those are the ones you should consider. Again, your scores will speak louder when getting a card with lower scores. 

Can I get approved for credit card with a 500 credit score? 

A 500 credit score lies in the bad credit category. Usually, 500-600 scores lie in the bad credit category, then anything below 500 is very poor. If you have such scoring, that does not mean that you cannot get a credit card. There are various cards that you can get as we speak. For your information, you can get approved for a credit card with no credit if you apply for a secured credit card. That means that bad credit scores should not be an issue whatsoever. 

There are credit cards that you can get with 500 credit scores. Some of them include the following. 

  • Navy FCU Rewards® Secured Credit Card 
  • Tomo Credit Card 
  • Petal® 1 Visa® Credit Card
  • Credit One Bank® Platinum Visa®
  • OpenSky® Secured Visa® Credit Card
  • Discover it® Secured Credit Card

What can you do with a credit card?

There are various transactions that you can do with a credit card. They include the following.

i) Buy goods and services

One can use a credit card to buy goods online by providing the card number, the expiration date, and the card’s CVV. Those are the critical details that you should provide to your merchant so that the card’s service provider can authorize the transfer. For your information, people who usually lose money via their debit cards usually lose it this way since most fraudsters know that you do not need a PIN to purchase using your card. 

Alternatively, you can present the card to a cashier at physical stores to swipe at the register to deduct the spent amount from your account. It takes a little time to finalize the payment and carry your goods with you. You can tap to pay.

Nowadays, we have contactless cards that just need you to place slightly above the card reader for automatic deduction of the spent money. That ensures that people stay protected from infections that can result from touching the cards by different people.

ii) Withdraw money at an ATM

Credit cards allow you to withdraw funds from ATMs for what we call cash advances. However, it is not wise to withdraw money using the card as there are high fees associated with the process. Financial advisors only recommend using the card for buying goods and services only. 

iii) Transfer money to a bank account

You can transfer funds from your card to a bank account using an online app or request a convenience check from your card issuer. You then deposit the check to your bank account, after which it undergoes the normal processing. 

iv) Fund transactions in mobile apps

You can use your card to fund transactions in Cash App, PayPal, Venmo, and others. Even though using your card to fund transactions still attracts high fees, sometimes it is still worth it. 

Is it wrong not to use my credit card?

Yes, it is wrong not to use your credit card, as it negatively impacts your score. You should make sure that you constantly use your card for your issuer to report your card usage. That way, your scores will continue rising.

Again, is it bad to have a lot of credit cards with zero balance? Once again, it is wrong to have credit cards with no balance. You might be happy because you do not owe any creditor, but that will lower your scores since the cards are dormant. 

Bottom line

 A credit card allows you to borrow funds from your issuer, whereby you can get either secured or unsecured ones. Secured credit cards do not require credit scores but a security deposit. Unsecured ones require credit scores. Interestingly, you can get a credit card even with bad credit scores. The borrowing limit of a secured credit card depends on your security deposit, while the one for unsecured credit cards depends on the number of your scores.