Securing a Canada Credit Card for Bad Credit

If you are now living with bad credit, whether due to financial mismanagement or something out of your control, securing a Canada credit card can be nearly impossible.  However, if you look in the right places, you will find some good card options, those designed specifically for people in your situation.  Depending on how bad your credit is, as well as the Canada credit card issuer, the card you would be approved for may or may not be a secured card.

With a secured Canada credit card, an account with the issuer would be opened.  Then, you would be advised as to the amount of money that you could deposit into that account.  Sometimes, the amount is only $300 but other times, $1,000 or higher.  Keep in mind that if the amount were low, most Canada credit card issuers would increase the amount over time as they see you are making payments on time and handling the account in a responsible manner.

Once you put the money into the account, that very amount becomes the credit spending limit associated with the Canada credit card.  In other words, if the amount you could deposit were $500, you would then have $500 as a credit line.  As the balance decreases with purchased made using the card, you would simply make additional deposits.  Because secured Canada credit cards are closely monitored and your handling of it reported to the credit agencies, it can actually help you repair credit.

Now, another type of Canada credit card for people with bad credit is the unsecured card.  Typically, this type of card is more difficult to find and terms are usually stricter.  In addition, to quality for an unsecured credit card, you would need to have a credit score of a certain amount.  Because the Canada credit card issuer is providing the money for your credit limit, the amount they would provide at first is low, usually no more than $300.

As with the secured Canada credit card, the unsecured card would be watched closely and your handling reported to the credit agencies.  Now, most issuers of unsecured cards will, at some point switch your account from unsecured to secured, so when looking at the different companies that offer a secured Canada credit card, make sure you choose those that would do this.  That way, your good account handling would be more impressive since the history with the issuer would be over a longer amount of time.

For the unsecured Canada credit card for people with bad credit, you would also be rewarded for handling the account properly.  In this case, the credit limit would slowly be increased, fees lowered, interest lowered, and rules loosened.  Regardless of the type of Canada credit card you end up with to repair your bad credit, make sure you choose a reputable issuer, understand all the terms of the card, and that at all costs, and make payments on time.  That way, your bad credit will begin to improve, which then makes you a more creditworthy person.