Since credit cards in effect are unsecured personal loans, in general credit card companies are careful to whom they send applications. You will notice that when you were a student you didn’t get any credit card applications in the mail, but as soon as you started earning an income, you were inundated with credit card applications.
Unsecured loans basically mean that the lender has no recourse to your assets, if you default on the loan. Hence, if you default on your credit card balance, then the only means the credit card company has to recoup their monies is by taking you to court. Because of this, credit card companies pay a lot of attention to credit ratings and credit history.
If you have a bad debt history, then it is highly likely that you will not be able to qualify for a credit card; especially not a mainstream one, issued by a reputable institution. However, now there are ways that you can obtain a credit card.
Nowadays there are special credit cards for people with a bad debt history. Many will start off with a very low credit limit and the cards are normally issued by financial institutions you probably have never heard of. Some are pre-paid cards, which means that you have to deposit some money into the card before you can spend it. Others are secured credit cards, which means that you have to pledge some sort of asset as a security to obtain the credit card. This way, if you default on your credit card payments, the credit card company can repossess this asset.
One disadvantage of cards aimed at those with a bad debt history is that they tend to carry higher fees and interest rates than regular credit cards. Look for high annual fees, much higher APRs (the annual interest charged) or other hidden hosts, such as high transaction charges on cash withdrawals.
However, a positive aspect of these cards is that some of them report directly to a credit rating agency. If you are able to manage the credit card wisely and keep up with payments, then the credit card can help you re-establish your credit history.