How to Earn Rewards When You Have Bad Credit

Let’s say you’re out to dinner with friends and when the bill comes, they whip out their fancy rewards credit cards.

They’re excited about the number of miles or points they’re going to earn. But you don’t have an elite credit card because your FICO score is less than 600. You kind of feel like an outsider.

Well, don’t fret any longer. You can say goodbye to FOMO (fear of missing out) right now. Keep reading to learn how you can earn some decent rewards while also boosting your credit score. Your card won’t turn heads, but you can still get excited about earning rewards.

How Bad Is Your Score?

You have to be honest with yourself about your credit score so you can identify your options. Don’t worry about your pride at this point. We’ll fix that later when you see your score climb to 670 and then on up to a glorious 740 FICO score.

There are many different credit scores, but most credit card issuers request a version of the FICO score when making lending decisions. So, I’m going to focus on the FICO score here.

FICO credit score ranges:

— Exceptional: 800+

— Very good: 740 to 799

— Good (or average): 670 to 739

— Fair (below average): 580 to 669

— Poor: 579 or less

Now, if your score is at least 720, you might still get considered for some of the best cards. Lenders look at more than just your credit score. But if you do get approved, your annual percentage rate will be much higher than it is for someone with an 800 FICO score.

[Read: The Best Starter Cards for Building Your Credit.]

Reward Options for the Score-Challenged Consumer

I’m focusing on ways to get rewards that will also help you rebuild your credit score. Here are a few types of credit cards that are easier to qualify for if you have bad credit.

Secured credit cards. There are several good secured credit cards that offer rewards. Granted, you’re not going to get a 50,000-point sign-up bonus, but that’s not what you need right now. What you need is to focus on improving your credit score. With time, you’ll start qualifying for those big sign-up bonuses.

A U.S. News survey showed that 36 percent of people with bad credit didn’t do any research before applying for a credit card. Some secured cards have rewards, but many don’t, so take your time reviewing the cards. It’s even possible to find a secured credit card that offers rewards and has no annual fee. These cards do require a security deposit, but you’ll get that back at some point as long as you use the card responsibly.

If you go with a secured credit card, though, you have to vow not to carry a balance. Some of the best secured cards have high APRs, so don’t mess around with your payments. Pay the bill in full and by the due date every month. Paying interest expenses will not only wipe out your rewards, but also lead to debt.

Now, if the thought of putting down a deposit doesn’t sit well with you, then there are two other credit card categories to consider.

Store rewards credit cards. It’s easier to get approved for a retail credit card that offers rewards than it is to qualify for a well-known unsecured card from a major bank. Many of the best retail cards only require fair credit, so if your score is in the high 500s, you have a chance.

These credit cards have their issues, such as high APRs and lower credit limits, but the trick is to pick the one that aligns with your spending patterns. For example, if you shop at Macy’s a lot, then you’re likely to benefit from its rewards program.

If you prefer Kohl’s to Macy’s, then read about the Kohl’s credit card. You want to get a card from a store that you really like. That way, you’ll hear about upcoming sales and earn rewards on purchases you planned to make anyway.

The downside? Experian’s State of Credit 2016 report showed that consumers have an average balance of $1,081 on their retail credit cards. Don’t let that happen to you. Keep low balances and pay the bill in full every month.

Gas-station branded credit cards. These cards are similar to store credit cards. The Shell Fuel Rewards gas credit card and the BP Driver Rewards cash-back program are two examples of cards in this category.

Depending on the card, you can earn decent rewards. As with a retail card, match your spending patterns. Choose the gas card that’s offered by your favorite gas station.

[Read: The Best Low-Interest Credit Cards of 2018.]

These cards can help you save money if you have a long commute or if you’re self-employed and your work keeps you on the road. The rewards programs differ among the gas stations, so you’ll have to read each program carefully in order to maximize your earnings.

Gas station-branded credit cards have high APRs and lower credit limits. So, keep low balances and pay the bill in full every month.

Can I Get Rewards If I’m an Authorized User?

Being an authorized user can be an effective way to boost your credit score. Whether or not you can redeem rewards depends on the credit card company and even on the specific credit card.

The majority of card issuers don’t allow authorized users to directly redeem rewards because they view that as the role for the primary cardholder. But some do allow it, so call the issuer and ask about the policy for sharing rewards as an authorized user.

And while you have the issuer on the phone, confirm that it reports authorized user activity to the major credit bureaus. Remember, we’re multitasking here. I want you to get rewards and improve your credit score at the same time.

[Read: The Best Credit Cards for People with Fair Credit.]

Even if the credit card in question doesn’t allow it, there’s a way to get around this obstacle. Simply have a talk with the primary cardholder and ask if you can share some of the rewards. If you come to an agreement, then when you’re ready to redeem cash back or a gift card, you can ask the primary cardholder to complete the transaction for you.

More from U.S. News

Can You Benefit From a Store Credit Card?

Best Apps for Your Credit Score

Proven Strategies for Earning More Credit Card Points

How to Earn Rewards When You Have Bad Credit originally appeared on usnews.com