Even with bad credit you can still qualify for a credit card in South Africa although not guaranteed. Individuals with low credit scores, or sometimes those who have been blacklisted can apply for a credit card. And other types of credit from certain financial service providers.
Credit cards for people with bad credit in South Africa include:
- Prepaid credit cards (to rebuild credit)
- American Express
Most of the cards that you will get guaranteed approval for with a bad credit record are prepaid cards.
These are excellent in helping you to rebuild your credit in South Africa showing a creditor you can be responsible with your spending.
Remember that your credit score is important and you should try to make your record look better before you find yourself in trouble.
It is also important to not fall into the trap of loan shark agencies. Who trick individuals into agreeing to high interest rates. That compound to high amounts in very short periods of time.
However if you need a credit card but you have a low credit score, it is possible to find some reputable financial service providers who will be able to help you.
Who finances individuals with bad credit?
There are certain financial service providers who will provide credit cards for individuals with bad credit. The important thing is to start to try and better your credit rating before you apply for a credit card.
Your application is much more likely to be approved if you can show that you have made an effort to improve your credit score.
Get a copy of your credit record and go through it carefully.
Contact a professional or speak to a friend or family member with experience in this area. To find out what steps you can take to better your credit score.
Make sure to pay back all of your debt on time every month and in full. Once you have made these changes, apply to your bank as well as several other financial service providers for a credit card. They should approve your card.
However there are other, less well-known financial service providers who will provide you with a credit card even if your credit score is low. And even if you have shown no attempt to improve it.
Some of these companies should be avoided as they are loan shark agencies and will only get you into further financial difficulty.
It is important to find out everything you can about a company before you do business with them and to read the fine print carefully.
What to watch out for when getting a credit card if you have bad credit
Make sure that you ask a professional for help and advice when you are looking for a financial service provider who will approve your credit card.
Also make sure that you are not getting yourself in over your head and that you will not regret the decision later.
How does an individual get a low score?
It is easy in South Africa to find yourself with a bad credit record.
People take on too much debt in the form of personal loans, vehicle financing, bonds, credit cards and store accounts.
It is also very easy to open a store account or to get credit from financial service providers. Because it is so simple, many people get too much debt and find themselves becoming overwhelmed.
With an increase in an interest rate, or an unexpected expense like a medical bill, they find that they are unable to make payments to creditors.
They may have signed contracts with each creditor agreeing to make payments of a certain amount every month. With interest added at a certain time, missing their payment means breeching their contract.
The non-payment will reflect on the individual’s credit record.
How can you better your credit score?
It is possible to better your credit score.
A prepaid credit card is one of the easiest ways to help improve your financial score if you use it responsibly.
Another thing to do at the first sign of trouble is to contact a debt counsellor to help you negotiate your way through your overwhelming debt.
Many people leave this for too long because of embarrassment.
A debt counsellor will be able to help you to manage your load and better your credit rating.
There is no such thing as guaranteed approval credit cards for people in South Africa that have a bad credit record.
Basically the better your financial history is, the easier it is to qualify for a card.
So the easiest credit cards to get are the prepaid cards.
Our advice is to improve your credit rating before you apply for a card and you will get guaranteed approval.
If you cannot wait that long then your best option for a credit card with a bad credit record is the prepaid cards.