As much as people feel as though they don’t like credit cards and would like to avoid them, they are a part of life. Most people at some point will need to have a credit card to use for something, making it essential that they are able to obtain one. Ex-felons may feel that they are at a disadvantage for being approved for credit cards, but that is not always the case.
There is no one best credit card for ex-felons. There are many different types of credit card options to choose from and some are going to be better than others. When you apply for a credit card they don’t necessarily know that you are an ex-felon. They may never learn that information about you and that is fine.
What Credit Card Companies Look For ::: When you apply for a credit card there is one major thing they will be looking at, which is how your credit is. Credit cards are based on a lending institution providing you with credit, and then you holding up your end of the deal by paying the money back. If you don’t pay off your bill each month completely then you will pay interest on the money that you borrowed from them each month to purchase things.
Upon applying for a credit card, the lending institution or credit card company will pull your credit. In doing this they will check with the major credit bureaus to see what your credit score is. If you have a good credit score, then there is good chance you will get approved for the credit card. If you have a poor credit score then you may be turned down for the credit card.
Why You May Have Poor Credit
As an ex-felon, you may have poor credit simply because you haven’t had a chance to earn good credit. Earning good credit and building the score up takes time. It is not something you can do overnight. You have to work at building up a credit score. They climb slowly, over time, depending on what you are doing with debt and the credit accounts that you already have.
Maintaining a good credit score is essential to be being able to get approval for credit cards, as well as have other types of credit extended to you. Buying a home or car where you take out payments will also require a good credit score. As an ex-felon, you may not have had the time and experience of building up, or earning, good credit over the years. This is especially true if you have spent time being incarcerated. During the time you were jail or prison, your credit was likely tarnished, and was not being built up or strengthened.
Most ex-felons who have recently gotten out of jail or prison likely have poor credit. That is understandable considering the circumstances. If that is the case for you, there are things you can do to build it up and earn a good credit score, which will help in your search for the best credit card for ex-felons.
Building up a Good Credit Score
Being able to get your credit score up higher is going to be crucial to getting the best credit card for ex-felons. It will help you get better interest rates, be able to earn cash back or points on dollars spent, etc. You can earn a good credit score by paying your bills on time, not being in more debt than your income can handle, and not having too many credit card accounts open at one time.
You want to watch your debt to income ratio, because that will impact your credit score. In other words, it can’t look like you have $50,000 worth of debt, but only make $10,000 per year. If it’s out of balance they will feel you have far more debt than you can handle, and it will bring your credit score down.
A good way to build your credit, and is likely the first best credit card for ex-felons, is to get a secured credit card. They are great for building credit, which will end up raising your credit score, and leading to you being able to get additional credit cards down the road that are not secured.
Secured Credit Cards for Ex-Felons
With a secured credit card the lending institution has nothing to lose. You are securing it by putting up the funds that will go into an account. Then you will use the credit card just like any other credit card. However, when you use it, the funds will be taken from that account after each purchase. After a month, they will bill you and you will send in the amount that you spent, building the account back up again.
You are spending your own money that is essentially in a type of savings account, but it is still a credit card, so you are earning good credit with it. As long as each month you make the payments on time and keep the bill paid you will be able to build your credit up. You can use the card just like non-secured ones to rent cars, make online purchase, buy things in the store, etc.
A secured credit card is the best credit card for ex-felons because it is easy to get. Since the bank doesn’t take the risk, because you are really spending the money you put into the account, it is easy to be approved for. However, each month that you use it well you will be helping your credit score to climb higher, which is crucial to earning good credit and being able to move on to getting the best non-secured credit card for ex-felons.
Always be sure to check the interest rates, stay on top of your payment due dates, and don’t spend more than you can afford. That’s the best way to build your credit score and still get approval for credit cards as an ex-felon.
