Q: Maybe this is wishful thinking, but is it possible to have bad credit and still get a card with a high limit?
A: Finding cards for bad credit is easy, but finding one with a high credit limit is like finding a needle in a haystack… hard to do, but not impossible!
Here’s what you need to know to get started…
1. Be realistic with your expectations
During the 90′s and 00′s it was rather either to get a credit card with bad credit, but when the credit crunch happened the business of lending changed permanently. Ever since then banks have been much more careful in how they loan money. The definition of a “high credit limit” is different for everyone, but hopefully your expectations aren’t too pie-in-the-sky.
2. Unsecured credit cards for bad credit will have lower limits
If you want unsecured, it’s unlikely you will be given a high credit limit (you’ll probably be lucky to get a starting limit of $1,000, but it will most likely be more like $500 or so). The most frustrating part about this is many also charge a monthly or annual fee, so it really sucks to pay for a credit card and not be given a high credit limit, but unfortunately that’s just the way it works.
3. With secured, high limits are usually possible
Secured credit cards with a high credit limit are very possible. In fact, I can think of a couple right off the top of my head that allow you to have up to a $5,000 limit with a security deposit.
Some people don’t like the idea of secured cards because they can’t afford a big security deposit upfront. Well, what you have to keep in mind is that your security deposit almost always is flexible… so the more money you add, the more your credit limit goes up.
That means that even if you start out with a security deposit of only a few hundred dollars, you can easily add some to it whenever you get a chance. Then before you know it, you will have a high security deposit and therefore a high credit limit. For many, this is perhaps the only way of getting credit cards for bad credit with a high credit limit.
The other big benefit is that your security deposit will probably be earning you interest, just like a savings account does. Then when your credit is good enough to move onto an unsecured, your security deposit will be fully refundable when you close the account.