Rewards with less than Perfect Credit

credit card rewards ccAll of us want excellent credit, but the reality is not all of us do.  However, imperfect credit shouldn’t mean you miss out on deals that can save you money.  Rewards credit cards are one of the best ways you can save money. You see them on TV advertising cash for travel or gifts just from your everyday spending. The rewards are real, and you can save hundreds of dollars per year with the right credit card.  But you don’t have to have perfect credit to take advantage of them. In fact, there are numbers to prove it.

Credit Karma is a site that tracks your credit score for free, and it has compiled data on what scores are approved for some of the best credit cards out there. Excellent credit starts with a score of around 720 out of 850. A score that high can be intimidating, and it’s easy to think you can’t take part in rewards cards with just average credit. But the reality is some of the most valuable rewards cards approve people with scores well below ‘excellent.’

Here’s how you can earn credit card rewards of your own:

Charge cards can be a good starter for rewards and building credit. They are different than credit cards because you have to pay off what you charge on them in full each month. Since you’re required to pay the card off every month, the bank may be more lenient in offering the card to you with less than perfect credit. For example, the Gold Card from American Express, a prestigious card with valuable rewards, had over 40% of its holders on Credit Karma with scores of 700 or less, with a score as low as 553 approved for an account.

You can use the rewards you earn on the card toward free flights, hotels, gift cards, and more. While it carries an annual fee, it can be a good way for you to help build your credit with a steady flow of on-time payments you can manage, raising your score.

After that, consider more cards. For example, there are some generous United Airlines credit card offers with bonus miles for signing up – 30,000 miles or more. These bonus offers can be worth hundreds of dollars in travel savings on United Airlines if you participate, and help reduce the cost of your next vacation substantially.

Or, consider a cash back card. The bonus offers aren’t as generous with travel credit cards, but you’re getting real savings on your purchases. But the big warning is to make sure you pay these rewards cards in full each month. Your goal should be to raise your score by taking on new credit lines, and paying the balances off each month, not maxing them out.

Were you able to sign up for a rewards card with bad credit?  If so, which ones?

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About Holly

Holly Johnson is a wife, mother of two, and frugal lifestyle enthusiast. She is the co-founder of Club Thrifty and a staff writer at Get Rich Slowly, Frugal Travel Guy, and U.S. News and World Report's "My Money Blog." Holly has been featured in the Wall Street Journal, Kiplinger Personal Finance, Fox Business, and Daily Finance.

Comments

  1. Thanks for the Credit Karma tip! I just signed up and it looks nifty so far :)
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  3. I really like that site, Credit Karma. It’s really helpful. I agree with your philosophy on managing your rewards cards. If you can’t pay the balance off every month, you’ll end up paying more in finance charges than you would ever earn with the rewards.

  4. I’ve been to credit karma too. It’s a great site and has some great tools too. I would like to get to the point where I am maximizing my credit card rewards potential, but right now I using them for balance transfers and taking advantage of the good rates. Hopefully soon when they are paid off I can focus more on the rewards programs. There are some really good ones out there if you can manage your cards right.

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