How to Get a Credit Card When You Already Have Debts
So, you have credit card debt. Not only that: you can actually use the financial wiggle room that another credit card might provide. What can a person do without money?
The very existence of debt does not exclude the possibility of obtaining a loan at your request. If you’re under pressure, one of these options can buy you time if you run into unexpected expenses.
Become an authorized user
If you have a healthy relationship with a close friend or family member who has a good credit rating, you might consider asking them to add you as an authorized user to one of their credit cards.
They don’t even need to give you a card – you can simply use it to improve your credit utilization rate and your credit history. If you look like you have more credit than you actually do, your card issuer is more likely to approve your application.
Borrow from your 401 (k)
Yes, we are usually not big fans of borrowing from your retirement account. But Anthony Davenport, CEO of Regal Credit Management and author of Your Score , makes a strong case for using it as a temporary method of freeing credit and increasing the attractiveness of credit issuers.
If you have 401 (k) money, you can take out a loan at a fairly low interest rate and use that money to pay off some of your credit card debt. Your credit utilization will improve once you release some of the credit, and you will look more attractive to card issuers considering your new loan.
Also, this method does not appear on your credit report because you are simply borrowing a loan from yourself and not another loan from the lender.
If you go this route, make sure you have the cash flow to pay off the loan on time, if not sooner.
Approach a familiar lender
If you have a good history of card payments that you already hold, contact your card issuer and ask them to open another card. “They already know and love you,” Davenport said. “Sometimes they don’t even do [credit check] on you.”
Most card issuers offer a variety of cards, so as long as you have decent credit and a solid payment history, they will do their best to accommodate you with another card. After all, it’s cheaper for a business to support a current customer than it is to attract and retain a new one.
Get a secured credit card
You might be thinking, “I’m stumped here, I have no collateral to get a secured credit card.” But with the help of a generous friend or family member, you might be able to turn it around.
A secured credit card requires a cash advance payment equal to your credit line. You can borrow from a very nice person assigned to you, say, $ 1,000 and open a secured card for that amount. Use a credit card as needed; then when you receive your deposit, repay your personal loan.
If you find yourself in such a situation, you do not need to be reminded that it is not ideal. But one of these methods can help you for several months until you regroup and get your debt back on track.