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How to Get a COVID-19 Loan with Bad Credit or After Bankruptcy

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Michael Bosio

Can you get a COVID-19 Loan with Bad Credit? With the continued spread of the COVID-19 pandemic in the United States, small businesses around the country have been looking for quick ways to access working capital to shore up their cash flow and pay operating expenses. Some of the more appealing options for small businesses have come about as a result of the Corona virus Aid, Relief, and Economic Security (CARES) Act, which was passed by congress and signed by President Trump to combat the economic fallout resulting from the pandemic.

Learn more @ https://www.biz2credit.com/blog/2020/04/14/how-to-get-a-covid-19-loan-with-bad-credit-or-after-bankruptcy/

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Best student credit cards for November 2020

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College and high school look a lot different this year. But whether students are on campus or learning at home this fall, there are still plenty of back-to-school expenditures. And if a student doesn’t already have a flush checking account in place, many of those purchases will need to be put on a credit card. But it’s not always easy for a student to get one from a typical credit card company — especially if they don’t already have a steady income and good credit.

Credit is a Catch-22: It’s important to have good credit, but hard to get — unless you already have it. Student credit cards address that conundrum. They provide a way in for those with a limited credit history by providing a small credit line. The card issuer takes the risk with the hope that most students will transition into full-time employment and stick around as profitable customers for years to come.

Best student credit cards

Best overall Best for students without a credit history Best for students who plan to carry a balance Best for students with a cosigner
Discover it Student Chrome Deserve Edu Credit Card Chase Freedom Student Bank of America Travel Rewards
Annual percentage rate (standard / penalty) 17.99% variable, with 0% for the first 6 months / None 18.74% variable / None 14.99% variable / None 14.99% to 22.99% variable
Late payment fee Up to $40 Up to $25 Up to $39 Up to $40
Cash back reward rate 2% on gas and dining (up to $1,000 in combined purchases each quarter), 1% on all other purchases 1% on all purchases 1% on all purchases; 4% cash back on Lyft until 2022 1.5% on all purchases
Eligibility requirements No credit history required, proof of income required No credit score required; no social security number required for international students Cosigners not allowed, proof of income required Cosigners allowed
Annual fee $0 $0 $0 $0

Most credit cards require applicants to have a high credit score (around 650 or so) and at least a few years of credit report history. To get a student credit card, however, you don’t necessarily need either — though some proof of financial experience and responsibility helps when it comes to securing a credit card offer. The card issuer looks at sources of income — even from part-time work or deposits from parents — as well as information about checking and savings accounts to get a sense of an applicant’s saving and spending. Luckily, once a student is able to get a card, simply making everyday purchases is an easy way to build credit (so long as the student is able to pay off their purchases).

In addition to more relaxed eligibility requirements, the best student credit card offers some of the following features:

  • Special rules for credit newcomers such as minimal late fees and no-penalty APRs
  • Lower credit limits — usually between $500 and $2,000
  • Cashback rewards program on spending
  • A “reasonable” APR — usually between 15 and 20%

We evaluated 19 credit cards marketed specifically to students. We selected four cards that stood out across a range of criteria including APR, forgiveness for credit mistakes, cash rewards and lenient eligibility requirements. Check out our picks below as well as some answers to frequently asked questions about student credit cards at the end of this article. We’ll update this list periodically.

The best student credit card overall

  • Standard APR: 17.99% variable (0% for the first 6 months)
  • Penalty APR: None
  • Late payment fee: Up to $40
  • Annual fee: $0
  • Cashback rewards: 2% on gas and dining, up to $1,000 in combined purchases each quarter; 1% on all other purchases 
  • Foreign transaction fee: 0%
  • Standout feature: No late fee for first late payment
  • Eligibility requirements: No credit history required, proof of income 

The Discover it Student Chrome offers a winning combination of cash back and other rewards as well as lenient terms for first-time credit card holders. You won’t get dinged by the credit card company for a late payment — at least the first one — or have to deal with an exorbitant penalty APR. And, of course, getting 1 to 2% back in rewards each month is a welcome bonus. Note that Discover offers another similar student credit card, the Discover it Student Cash Back credit card, but the rotating bonus categories make things overcomplicated, especially for first-time cardholders. 

Features and rewards

Most student credit cards offer 1% cash back. The Discover it Student Chrome card bests that with 2% cash back on gas and dining, plus a generous cashback match at the end of the first year. The match effectively doubles your first year’s bonus rewards, so if you receive $75 in cashback rewards during the first 12 months, Discover will chip in an additional $75. We also like that the Chrome student credit card incentivizes good grades: You can earn a $20 statement credit for each school year you maintain a GPA of 3.0 or higher. 

Rates and fees 

Discover’s rates and fees are generally lower than competitors’. The APR charged on purchases ranges between 12.99 and 21.99%, and there’s an introductory six-month period with 0% APR. Students with the Discover it Student Chrome also don’t have to worry about a penalty APR, which some issuers will institute if a card holder misses a payment. There’s no late fee for the first late payment, but for the second instance the credit card company charges up to $40, which is comparable to other cards. 

At the moment, most study abroad programs have been put on hold. That noted, the Chrome student credit card has no foreign transaction fees — though Discover isn’t as widely accepted outside of the US as Mastercard and Visa.

Best for students without a credit history

  • Standard APR: 18.74% variable
  • Penalty APR: None
  • Late payment fee: Up to $25
  • Annual fee: $0
  • Cashback rewards: 1% on all purchases 
  • Foreign transaction fee: 0%
  • Standout feature: Low late payment fee
  • Eligibility requirements: No credit score required; no social security number required for international students 

Deserve Edu Mastercard positions itself as an alternative to the traditional banks and credit card issuers, and specializes in credit cards for students and first-timers. And the Deserve Edu student credit card checks many of the boxes: It offers 1% back on all spending, features a relatively low late payment fee and comes with a flat 18.74% APR. While it offers a lower student rewards rate than others, its relaxed eligibility requirements are well suited for students with a brief or nonexistent credit history or other potentially disqualifying limitation — like not having a social security number, if you’re an international student. 

Features and rewards

The Deserve Edu student credit card offers 1% cash back on all purchases, which can be redeemed for statement credits in increments of $25. Card holders also get one year free of Amazon Prime Student — worth around $40 — and up to $600 of credit toward cell phone protection coverage when you pay your monthly bill with it. 

Rates and fees

The 18.74% variable APR is relatively low for a student credit card, and it’s not tied to your credit score, so you know exactly what the APR is at the outset. Rather, the APR is “variable” because it’s tied to the “prime rate” — a benchmark interest rate used by lenders that changes over time. With most other cards, you won’t know the exact APR certain until you’ve been approved — and if you have a limited or nonexistent credit history it could be on the higher end of the range of what the issuer advertises. If you miss a payment, there’s no penalty APR — though you may be charged a late payment fee of $25. (Still, that’s about $15 less than the fee charged by most other student cards.) Deserve doesn’t charge any foreign transaction fees.

Best for students who plan to carry a balance

  • Standard APR: 14.99% variable
  • Penalty APR: None
  • Annual fee: $0
  • Late payment fee: Up to $39
  • Cashback rewards: 1% on all purchases; 4% cash back on Lyft until 2022
  • Foreign transaction fee: 3%
  • Standout features: Free, unlimited access to credit score; Earn a credit limit increase after making 5 monthly payments on time
  • Eligibility requirements: No cosigners, proof of income

The student version of one of our favorite cashback credit cards, the Chase Freedom Student credit card has a lot to offer. The 14.99% variable APR is one of the lowest available for student credit cards, and you get a $50 credit when you sign up, a $20 bonus every year and a credit limit increase after five on-time payments.

Features and rewards

Chase offers cardholders free and unlimited access to their credit score, which can be an important tool for those building credit from scratch. The credit limit increase is another nice feature as credit utilization is a primary factor in a credit score. Most credit experts recommend using less than 30% of your total credit available, so the higher the limit, the easier it is to keep your utilization low.

Its 1% cash back on all purchases is consistent with the category average and the 4% back on Lyft rides is nice (though less practical for many in the coronavirus era). The $50 sign-on bonus can be triggered by making a single purchase in the first three months so you need not worry about hitting a high spending threshold. And the $20 annual reward can be redeemed for five years — as long as your account remains in good standing. 

Rates and fees

Every cardholder gets the 14.99% variable APR — so you know what you’re signed up for at the outset. It’s best not to maintain a balance month-to-month, but if it happens once or twice, the interest will be lower than with other cards.

A few words of caution: This card’s late payment fee can run as high as $39 for a first late payment; most other student cards have a lower penalty or no penalty for first-time offenders; and if you’re planning on studying abroad, this card will subject you to a 3% foreign transaction fee. 

Best for students who have a cosigner

  • Standard APR: 14.99% to 22.99% variable
  • Penalty APR: Up to 29.99%
  • Late payment fee: Up to $40
  • Annual fee: $0
  • Cash back rewards: 1.5% on all purchases
  • Foreign transaction fee: 0%
  • Eligibility requirements: Allows cosigners

Bank of America is one of the few card issuers that allows cosigners, who can be a parent, guardian — or anyone with a good credit score who’s willing to share the legal liability. On the other hand, any late or missed payments or high outstanding balances will also negatively affect the cosigner’s score. 

Features and rewards

This student credit card is essentially the same as Bank of America’s Travel Rewards card, which means it offers higher risks and rewards than most other student cards. You get a higher cash rewards rate — 1.5% back on all purchases — but fewer of the relaxed requirements for credit novices. And points can be redeemed only as statement credits against travel purchases; so, unless 1.5% of your spending is on taxis, Uber or Lyft, flights, baggage fees, hotels, rental cars, buses, trains, amusement parks or campgrounds, this card’s rewards aren’t particularly valuable.

Bank of America will grant you 25,000 points — equivalent to $250 — when you sign up if you spend $1,000 during the first three months. That’s a higher threshold than you’ll find with other student cards, but also a higher reward. Bottom line: If you can time your credit card application with a large purchase, it’s worth it.

Rates and fees 

Bank of America offers an introductory 0% APR for the first year and no foreign transaction fees. That being said, this student credit card doesn’t mess around when it comes to penalties: The standard APR runs between 14.99% and 22.99% depending on your credit score — but if you’re late with a payment, you could be hit with the 29.99% penalty APR. That’s exorbitant — and it comes in addition to a $40 late payment fee. Students at risk of paying late should avoid this card at all costs.

How does a student credit card work?

Student credit cards offer those with limited or no credit a way to start building credit and create a credit history. They generally come with lower credit limits than typical credit cards and don’t charge annual fees. And they often have novice-friendly features, including late payment forgiveness, incremental credit limit increases over time and credit education resources. Reward rates may be lower than standard cashback and travel credit cards, however, making student credit cards a lower risk, lower reward financial tool.

Are secured credit cards a good option for first-time credit card holders?

Secured credit cards offer a way to build good credit or repair bad credit — but they’re better suited for those who have bad credit or a nonexistent credit history. Secured credit cards also require an upfront security deposit in the amount of your credit limit; for $1,000 of credit, you have to give the bank $1,000. In effect, the bank is loaning your own money back to you — sometimes with an annual fee or high interest rate. If you don’t have another option, a secured credit card may make sense. But a secured card shouldn’t be the first choice for a credit newbie.

What do you need to qualify for a student credit card?

Most credit cards require an applicant to have a credit score of at least 650 and a substantial credit history. Student cards don’t. Still, you may need to demonstrate some financial responsibility — including a source of income, even from part-time work or deposits from your parents. The card issuer may also want to see information about your checking and savings accounts to get a sense of your spending habits and confirm that you’ll have sufficient funds to pay the minimum monthly payment. 

How do cashback rewards work?

For all the cards listed above, “cash back” refers to a statement credit that’s applied to your account to lower your balance. For the Bank of America Travel Rewards card, for example, you can only redeem rewards against travel purchases. But for most other cards, cash rewards can be applied toward a balance regardless of expense type.

Read moreThe best cashback credit cards

Cards we researched

  • CapitalOne Journey Student Rewards
  • Discover it Student Chrome 
  • Discover it Student Cash Back 
  • Deserve EDU Student
  • Bank of America Cash Rewards for Students
  • CapitalOne Secured Mastercard
  • Bank of America Travel Rewards for Students 
  • Citi Rewards + Student
  • OpenSky Secured Visa
  • BankAmericard for Students 
  • StateFarm Student Visa 
  • Wells Fargo Cash Back College 
  • Petal Visa 
  • Chase Freedom Student
  • CapitalOne Platinum
  • Discover it Secured
  • Chase Freedom Unlimited
  • Citi Double Cash Card
  • CapitalOne Quicksilver Cash

Disclaimer: The information included in this article, including program features, program fees and credits available through credit cards to apply to such programs, may change from time-to-time and are presented without warranty. When evaluating offers, please check the credit card provider’s website and review its terms and conditions for the most current offers and information. Opinions expressed here are author’s alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.

The comments on this article are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved, or otherwise endorsed by the bank advertiser. It is not the bank advertiser’s responsibility to ensure all posts and/or questions are answered.

Read more: Best balance transfer credit cards of 2020

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Beware of Spot Deliveries! | Auto Credit Express

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A spot delivery is often considered a scam technique that some dealers use to get you to take delivery of a car immediately after you agree to a deal. However, just because you agreed to a deal verbally and put some cash down doesn’t mean that things can’t change or that the vehicle is yours to keep.

Spotting Spot Delivery Scams

Beware of Spot Deliveries!Spot deliveries, also called yo-yo financing, simply means that you drive off with the car before the financing process is done. This is problematic because you can sometimes drive home with a vehicle, only to get a call later that your auto loan application was rejected.

Once you get that call that your financing didn’t go through, one of two things tend to happen next:

  1. You have to draw up a new contract with the lender, typically with different terms than you originally agreed to.
  2. If you don’t want the new terms or can’t afford the payments, you’re forced to return the car.

This can be an emotional rollercoaster, and it’s extremely inconvenient. You get to drive off with your next vehicle, elated that you were tentatively approved, only to find out that you must return to the dealership to start the process over again.

Often, bad credit borrowers can be victims of a spot delivery scam. Once they hear they can take the car home, it feels like a done deal and that everything is sorted. When you’re struggling to get an auto loan approval, some borrowers take what they can get if they need a vehicle quickly.

This is the yo-yo part – going back and forth between an approval and a denial, and from home back to the dealer until something can be finalized.

Avoiding a spot delivery scam is simple: just don’t drive off with the car until all of the necessary paperwork is completed and finalized. This means verifying that you’ve signed the title, the financing documents, and the sales contract. Don’t put any money down on a vehicle until your financing is approved, and don’t drive away from the dealership with any documents left unsigned.

Additionally, bad credit borrowers can explore other financing options if they’re struggling to get an auto loan approval.

Trouble Getting an Auto Loan?

If you’ve had issues finding a lender that can work with your credit, consider special financing. Special financing dealers are signed up with subprime auto lenders that are equipped to handle all sorts of unique credit situations like a past repo, bankruptcy, or poor credit. Instead of basing their loan decision on credit score alone, they examine the many parts of your financial health to determine your ability to take on a car loan.

After you submit your items to a special finance dealership, they’re sent off to one or more subprime lenders that see if you’re ready for an auto loan. Based on your income and overall stability, subprime lenders tailor a car loan (if you qualify) to your situation.

This means approving you for a monthly payment that fits your budget, also called a payment call. Subprime lenders see if you qualify before you pick a vehicle – not afterward. The financing process is done before you take a car home, unlike a spot delivery.

Subprime lenders also report their auto loans to the credit reporting agencies, giving you the chance for credit repair. With an improved credit score, you can have more options for new credit, and hopefully qualify for a better interest rate and possibly a higher loan amount on future car deals. Getting out of bad credit should be a priority, since it can determine so much of your vehicle buying power.

Finding the Right Car Loan

Instead of hoping to run into a dealer that has bad credit lending resources, start with us at Auto Credit Express. We know where special financing dealerships are, and we match bad credit borrowers to them daily.

To get connected to a dealer in your area, fill out our auto loan request form. It’s completely free, secure, and carries no obligation. Get started now!

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Bad credit rating: How you get it, how it affects you and how to clear it

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Finance expert Lacey Filipich explains what you need to know if you have a bad credit score – including how you get one, how it affects future loans, and how to clear it.

As our options for accessing debt have expanded (I’m looking at you Buy Now Pay Later,) Australian consumers have gotten savvier about credit ratings affecting their finances.

Some of you may even have had your credit rating pronounced ‘bad’.

If you haven’t thought about your rating before, this might feel like getting a big fat ‘F’ on your school report card for a subject you didn’t even know you were taking.

If this bad credit rating is affecting whether you can get something you need – for example, a mortgage – what can you do to fix it?

First, let’s start with where that rating comes from.

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How your credit rating works

The credit rating system is a regulated shortcut. Lenders can see at a glance via your score whether you’re a good bet financially. It’s not the only thing they look at, but it’s part of the mix in assessing you as a customer.

Keep in mind that a lender is anyone who might send you a bill. Even a gas bill paid at the end of the usage period is like credit, right? They’re advancing you a service or product. Whether you pay them, on time and in full, is a reflection on how you treat debt.

Over time, your behaviour with debt generates your aggregated score.

Your rating depends on:

  • What kinds of debt you’ve used before.
  • Whether you’ve paid back those debts on time.
  • Whether you defaulted on any bills or repayments, meaning you haven’t paid by the agreed date and/or to the agreed amount (time and dollar value limits apply).
  • Applications you’ve made for credit elsewhere.
  • Whether you’ve been bankrupt, or had to negotiate an agreement to change how you repay a debt through legal channels.
  • How many requests there have been for your credit report from other credit providers.

Actions perceived as positive, such as paying your debts in full and on time, improve your credit rating.

Actions perceived as negative, such as missing payments or defaulting or a lot of credit checks, reduce your credit rating.

And it doesn’t matter what you bought with the debt. Credit ratings don’t reflect the value of the asset that debt paid for.

RELATED: 7 essential money hacks for first time parents

bad credit rating

What is a ‘bad’ rating, and how do you get one?

There are three main credit reporting agencies in Australia: Equifax, Experian and Illion.

Just to make things difficult, they use different scales (0 to 1000 or 1200) and different cut-offs to define ‘good’ and ‘bad’. Thanks *so* much, guys.

With Equifax, ‘bad’ is 505 or below. For Experian, it’s 549 or below. And with Illion, it’s 299 or below.

Because credit ratings are based on rolling information – generally five to seven years’ worth of your monthly behaviours with debt – they can change a lot.

If you repeatedly pay bills late, or you default on debts you’ve agreed to, or you apply for lots of different forms of credit, your rating drops.

You might also have an adverse impact from something that you’d consider unfair or wrong appearing on your credit report.

RELATED: Home loans: Is fixed or variable the best option?

Can you fix your credit rating if it’s bad?

If your application for a loan has been knocked back due to a bad credit rating, it’s a good idea to check your report via one of those three agencies.

Mistakes can happen. Incorrect names or erroneous account details might mean you’ve been attributed to actions that belong to someone else.

Intentional fraud can also happen. If someone steals your identity and starts racking up debt against your name, you want to get that sorted quickly.

There may also be notes on your file that you consider unfair. Perhaps the lender didn’t notify you properly, or listed a default while you were disputing the charge (which they shouldn’t).

To fix errors or unfair items, you can request amendments. You’ll get a positive impact on your credit rating quickly this way.

Sometimes, a poor credit rating is just like the impact of poor diet or no exercise. It’s real, and it’s down to your behaviour.

And just like diet and exercise, quick fixes aren’t usually effective. It’s about consistent, positive debt behaviours. Over time, these little steps add up to an improved credit rating.

Firstly, Pay. Your. Debts. On. Time. All your debts – utility bills, credit cards, mortgages etc.

If you can’t make your payments, speak to your lender proactively so you can agree a mutually satisfactory arrangement. That means you don’t get a strike against you with the credit agencies. Consider talking to a financial counsellor if you’re using debt to cover basics, as that’s is not a good place to be.

Secondly, use debt judiciously. Don’t apply for any and every credit card. Keep your credit card limits to a reasonable minimum.

Finally, channel the old Pantene mantra: it won’t happen overnight, but a good credit rating will happen (if your behaviours are positive).

Be patient and sensible, and you’ll get there.

Lacey is the founder of Money School and Maker Kids Club, where she shares lots of ideas and tips on the whole family being smarter with their earnings. 

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