Bad Credit Credit Cards
There are many people who end up in heavy debt due to some costly mistakes with
credit cards. They then advise others to not use credit cards, but in reality,
if credit cards are used wisely, they are wonderful financial tools for us. The
good news for such people is a certain type of credit card which is available
to them- bad credit credit cards.
Secured and unsecured credit cards
There are two categories of credit cards- secured and unsecured credit cards.
Unsecured credit cards are the cards we are all familiar with and which one
does not have to put down any collateral for. These cards are usually aimed at
people with less than prefacer credit; and thus charge an annual fee or a
higher rate of interest than normal credit cards. Normal cards are not
advertised as non-secured, but one needs a good credit rating to get them.
Bad credit credit cards are actually secured credit cards which are formulated
to help people with poor credit get a credit card. In these cards, the cards’
account is usually tied to a savings account for security. If the savings bank
has $500, then the credit limit on the card is limited to $500. So with this
security, credit card companies can take the risk of offering bad credit cards
to those with the worst credit risks! A sincere piece of advice to those in
deep debt is to consider if a credit card is really necessary, as this may only
make their well of debt much deeper.
Denial of credit is against the law
You can get your bad credit credit card approved faster if a friend or family
member co-signs for the card. Their credit counts as well, so choose someone
with a good credit who has the capacity of paying back the loan if you can’t.
Till you get your credit card, make sure that all your bills are paid on time.
This is a quick and easy way of building your lost credit history once again.
On approval, these cards are mailed out just like normal credit cards.
Once you receive the credit card, offers for other cards will start coming in
the mail. Don’t get more than three credit cards, or you may fall in the debt
well again! Don’t get a credit card from a chain of stores, instead go for Visa
or American Express as they are widely accepted. Choose cards without an annual
fee, and if you are denied credit, there is a law stating that the company has
to tell you why you are denied credit.
Bad credit credit cards don’t need employment verifications
Most bad credit credit cards have fees associated with them upon application
approval. Make sure to read all the fine print when applying for this card, as
it contains the fee schedule of the card. There’s the program and set-up fee,
which starts from $29 onwards. It’s easy to earn credit limit increases over a
period of time with this card. The company monitors the account of the payments
and usage, and determines if the user is more credit worthy to award a credit
increase. These credit card companies also offer 24 hour access to their banks
through phone and internet so that their cardholders may manage their credit
accounts wisely. Some cards offer these services free of charge like the
Orchard Bank Gold Mastercard and the Orchard Bank Mastercard while some cards
charge a fee. There are also some bad credit credit card companies that extend
a line of credit to the consumer even without any employment verifications or
income requirements.
Bad Credit Credit Cards
There are lots of reasons your credit could be jeopardized. If you’ve had to
pay unexpected medical bills or haven’t worked for a few months or more, you
may need a little extra help getting your finances back on track. Credit cards
specifically designed for bad credit may be the answer.
Prepaid Credit Cards
Prepaid cards are a great way for you to keep track of exactly what you’re
spending, as well as help you avoid spending more than your budget will allow.
Prepaid credit cards work much like a debit card or bank account, in that you
can only spend what you’ve deposited onto the card, but you have the
convenience of shopping wherever the credit card logo is shown. MasterCard and
Visa both have varieties of prepaid cards that are ideal for helping you manage
your expenses.
‘Regular’ Credit Cards
You may still be able to get approved for a credit card even if your credit is
less than perfect. The requirements for a bad credit credit card are a little
less demanding, however. You’ll have to show verification of employment, as
well as a steady bill paying history, usually between six months to a year.
Keep in mind that this new credit card should only be a benefit to you, and you
should use it as a tool to rebuild your credit. Be sure to find out what the
late fees are for payment, as well as the Annual Percentage Rate (APR) on each
card that you’re considering. Make sure that you can afford the total price of
the payment before applying for and accepting a card, so as not to make your
financial situation worse. A number of banks and financial institutions offer
these types of credit cards (your bank may be one of them), and you can also
find bad credit credit cards distributed by Visa and MasterCard.
Re-establishing Good Credit
Once you’ve applied and have been approved for a credit card, immediately
include this bill in your monthly expenses. Only spend what you know you can
afford to pay for on the credit card, and if possible, have one credit card for
household use (i.e. grocery shopping, paying bills) and another for emergency
use only. Following these simple steps, along with managing the rest of your
finances, could have you on the road to good credit sooner than you think.