Q: I am a new college graduate with a full time job, but I have bad credit. What card is best for me? How do I avoid paying outrageous interest rates?
First of all, there are three ways to avoid paying any interest on a credit card.
The sticking point for you may be that most low-APR cards require good to excellent credit.Finding the best credit card
You say you have bad credit, but you don't want to pay "outrageous" interest rates. Well, the reality is, depending on how bad your credit really is, you may be stuck with very high rates of perhaps 20 percent APR or higher. It really depends on your credit rating. So the first thing you should do is get a sense of the true condition of your credit. Maybe it's not as awful as you think.
The only way to know for sure is to check your credit reports from the big three credit bureaus, Equifax, Experian, and TransUnion. You can get all three reports free of charge at AnnualCreditReport.com.
You should also check your FICO credit score, which can range from 300 to 850 points. The higher your score is, the better a lending risk you are deemed to be. The lower your credit score, the worse off you are doing from a credit-scoring standpoint.
If you have truly bad credit, like you think that you do, it may be the case that you can't qualify for a traditional, unsecured credit card at all. Or if you are able to get one, you may get stuck with a subprime card that carries those "outrageous" rates you're trying to avoid.Consider a secured credit card
An alternative strategy to getting an unsecured card is to seek out a secured credit card, which is a true credit card that requires you to prepay part of your credit line up front. Look for one with a low minimum deposit to get started, a low annual fee, and reports your payment history to the credit bureaus, to help you start rebuilding your credit rating. Good luck!
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