Are you tired of your bad credit score preventing you from experiencing the joys of travelling? Fret not - we at Flik Eco have got your back! In this comprehensive guide, we'll introduce you to travel cards designed specifically for those with bad credit. Get ready to explore the world while simultaneously rebuilding your credit score!
Travel Cards For Bad Credit Table of Contents
Understanding Bad Credit and Travel Cards
What is Bad Credit?
Bad credit refers to a low credit score, typically below 580 on a scale of 300 to 850, which makes it difficult for individuals to secure credit or loans. This less-than-stellar score could be due to missed payments, high credit utilization, or having a short credit history. Lenders consider individuals with bad credit as high-risk customers, making it challenging for them to obtain credit cards or favorable terms on loans.
What are Travel Cards?
Travel cards are credit cards that primarily focus on providing rewards and perks for frequent travelers. These benefits may include miles or points redeemable for flights, hotel stays, travel-related purchases, and more. Travel cards can also come with additional perks, such as no foreign transaction fees, airport lounge access, and travel insurance, making them an ideal option for frequent travelers.
Travel Cards for Bad Credit
Despite having bad credit, there are still some travel card options available for individuals looking to build their credit score while reaping the benefits of travel rewards. Here are a few great options:
1. Secured Travel Cards
- What are they? Secured cards require a security deposit, typically equal to your credit line, to protect the issuer against potential losses. They function like regular credit cards, allowing you to make purchases and earn rewards. As you demonstrate responsible credit usage, your credit score will gradually improve.
- Benefits: Secured cards offer an opportunity to build credit and earn rewards. They are relatively easy to qualify for, even with bad credit, as the security deposit reduces risk for the issuer.
2. Credit-Builder Travel Cards
- What are they? Credit-builder cards are specifically designed for individuals with poor credit. They usually come with low credit limits and higher interest rates, but their primary purpose is to help you rebuild your credit by reporting your payment history to the credit bureaus.
- Benefits: Credit-builder cards can be an excellent tool for responsible credit use, ultimately leading to improved credit scores. Some of these cards may also offer travel rewards to sweeten the deal.
Travel Cards For Bad Credit Example:
Let's imagine Sarah, a young professional with a bad credit score of 550. She wants to build her credit while also earning travel rewards for her frequent work trips. After researching her options, Sarah decides to apply for a secured travel card.
She opens the account with a $500 security deposit, earning her a $500 credit limit. Sarah uses this card throughout the year, paying off her balance in full each month. The card issuer reports her timely payments to the credit bureaus, gradually improving her credit score.
After a year, her credit score has significantly increased, and she's amassed a decent number of travel rewards points. Sarah can now use these points to redeem flights or hotel stays while enjoying the additional benefits of her secured travel card, such as no foreign transaction fees and travel insurance.
Bad credit scores shouldn't stop you from enjoying the excitement of travel. With the right travel card tailored to your needs, you can rebuild your credit while still collecting valuable travel rewards. Do your research, choose a card that aligns with your credit-building goals, and use it responsibly to secure a brighter financial future.
If you found this article helpful, be sure to share it with friends and family. And don't forget to explore the wealth of other personal finance and investing guides here at Flik Eco. Happy travels!
