Credit Cards For Bad Credit - What Are My Options?
By Ken S
Are there credit cards for bad credit? The answer is yes. If you have been over 30 days late on loan, charge card, or mortgage payments, if you have unpaid medical bills, or if you have legal judgments against you such as child support or other lawsuits, you may have "bad credit". There are many of us who have been unable to keep up with our monthly bills and have fallen behind in the last 12-24 months.
You may be thinking there are no options or credit cards for bad credit. That is not true. Access to a credit card is almost required in this age of technology we live in. This increasing need for consumers to make credit card purchases creates the demand for more and more credit cards for bad credit.
There are three types of credit cards that are available for people with bad credit. The first type is called a prepaid credit card. With a prepaid card, you get out of it exactly what you put in. Similar to a checking account, you deposit a certain amount of money into an account and this is your spending limit. When your prepaid credit card balance reaches $0, you can "recharge" it by depositing more money into your account. Prepaid cards are great for budgeting, online purchases, and those that cannot obtain a conventional checking account. Approval is usually guaranteed regardless of your credit score and there is no need to deal with the credit bureaus.
The second type of card you can obtain is a secured credit card. With a secured card, you deposit a cash amount into an interest-bearing savings account. This amount becomes your collateral. You are then issued a card and a line of credit in the amount of your deposit. When you make purchases, your credit limit decreases, monthly payments are calculated, and you are sent a bill. If you make purchases, a monthly payment is expected just like a regular credit card. Secured cards are great because they function like regular credit cards allowing you to book travel arrangements such as hotels and rental cars that do not accept prepaid cards or debit cards. Like prepaid cards, approval is usually guaranteed regardless of your credit score. Unlike prepaid cards, many secured card issuers report payments to credit bureaus. This can be a great way to establish or re-establish your creditworthiness by showing timely payments. After several consecutive timely payments, many secured card issuers will increase your credit limit without requiring an additional deposit.
The third option is an unsecured credit card. This is a regular charge card that does not require a deposit, and your credit score is taken into consideration. If you have bad credit, the limit on an unsecured card may be lower than a person with good credit, and you may be subject to slightly higher interest rates and/or fees, but the advantage is that you will not have to make any kind of deposit up front. Many unsecured credit cards for bad credit come with credit limits up to $1000. Making small purchases and timely monthly payments can help you re-establish creditworthiness as most unsecured card issuers report your payments to the credit bureaus.
Click here to get credit cards for bad credit [http://www.lowratesearch.com/credit_cards_for_bad_credit.html] or click here to do a low interest rate credit card [http://www.lowratesearch.com/low_interest_rate_credit_card_search.htm] search. Remember, making timely payments is a sure way to prove creditworthiness. And if your credit is bad, you should also consider debt negotiation, debt settlement, debt counseling, and credit repair. Getting your debts under control is key toward achieving better credit.
Ken S. is the founder of LowRateSearch, where the mission of the company is to help consumers save money. Visit LowRateSearch and get connected with credit cards, credit help, credit reports, credit repair, debt settlement, debt negotiation, debt counseling, and more.
Unsecured Credit Cards for Bad Credit: Knowing What Is Out There
By Mark Venite
Bad credit ratings are no friend to loan applicants, but they are equally damaging to the chances of securing credit card approval. But that is not to say bad credit borrowers have no credit card options open to them. In fact, there are unsecured credit cards for bad credit borrowers, and tailored to suit their needs.
Remember that card issuers would prefer to approve an application than reject it, since only issued cards can lead to profits. But it is also true that they have policies that are strictly adhered to. So, getting approval despite bad credit requires some planning and effort, and come at the cost of compromises like high interest rates, for example.
Before ever seeking a credit card, it is important to understand exactly where the costs lie and how expensive the card might prove to be. After all, it is the costs associated with an unsecured credit card that makes it potentially so expensive.
Unsecured Cards Explained
Actually, it is this kind of credit card that we are more familiar with, and for that reason they are not difficult to explain. Because these cards are unsecured, issuers accept the main share of the risk involved, and when they approve unsecured credit cards for bad credit applicants, the risk is perceived to be even greater.
The consequence for the cardholder is that a higher interest rate is accepted, as well as a usually small credit limit. Normally, interest can range between 8.5% and 10.5%, depending on the card company, but when a company grants approval despite bad credit, the rate can be 13% to 19%. Credit limits can vary too, with $10,000 a generous limit.
What this means is that unsecured credit cards should not be used as freely as the cardholder might like if they are not to be too expensive. Careful management of the card is hugely important, with the long-term benefits making future applications easier.
Card Charges to Consider
The idea of unsecured credit cards for bad credit borrowers is a worthy one, with cardholders effectively being given a chance to improve their credit rating. But how the cardholder uses the card is the core reason for any future credit problems. Every time it is used, the charges incurred need to be considered.
It is not unusual for cardholders to make purchases but not fully repay the balance when the bill arrives. Between the interest rates and any late payment fees, the cost of the card can be extremely high. Securing approval despite bad credit provides a great opportunity, but it is always necessary to repay what is spent. This is where a budget becomes so useful.
So, with any unsecured credit card, be sure to read the small print to discover all of the relating charges and fees and remove the risk of surprise. Also, understand that in some cases, the excellent APR quoted can be permanently increased if repayments are late.
Avoiding High Card Costs
Keeping credit card costs down really depends on one thing, namely repaying the card balance on time. While getting unsecured credit cards for bad credit management purposes is a boost to any bad credit borrower, not paying the full balance promptly can see the break become a disaster.
Not everyone knows that the interest charged on purchases is only applicable at certain times, and if the balance is paid quickly the interest will be lower if not zero. If the balance is allowed to add up over the months, then the interest will build too and quickly the bill becomes another troublesome debt.
Also, be sure to stay within the credit limit. If the balance on a $10,000 credit limit reached $11,000, then the extra fees applied can create huge financial problems. Eventually, the simple task of repaying the unsecured credit card will become almost impossible.
Mark Venite is the author of this article and a successful financial advisor with 20 years of experience. He helps people to get approved for Bad Credit Personal Loan and Student Loans with Bad Credit. For more information about his services please visit him at AccessMyLoan.com
Credit Cards for Bad Credit - Re Establishing Yourself
By Kerry Hedden
Millions of Americans suffer with bad credit. Bad credit can occur for a number of reasons. These reasons may include poor money management, divorce, child support neglect, medical issues, unforeseen accidents and events, and similar situations. Bad credit may be the fault of the individual that experiences it, or a result of unforeseen circumstances that happened to an individual. However, creditors are unforgiving. If you owe money, you owe money...period. This makes it very difficult for a person who has bad credit to convince lenders that they are worthy for an extension of further credit. However, there are some credit cards for bad credit that an individual in this situation may find appealing.
Most standard credit card companies will make a credit report inquiry prior to approving you for a line of credit. The credit report contains a lot of personal and statistical data regarding you as an individual, as well as any important financial data. When a credit card company reviews your financial report, they can see how many open accounts you have, how many closed accounts you have, any public records pertaining to you, and any type of financial judgment that involves you. They can also see the places that you have been employed and the areas that you have lived.
If a credit card company investigates your credit report and finds that you have a lot of negative items listed, you have not held a job for an extended amount of time, and have moved to various areas quite frequently, they may view you as a high risk. It is unlike any potential lender to make any investment in a high risk. Therefore, you will probably be denied any type of credit limit with a credit card that is offered with that company.
It is important to understand that this will prove to be harsh on the emotions. However, you should proceed in your search for credit cards for bad credit. One option that you have is to open a bank account. Many bank accounts offer debit cards, which are similar to credit cards as far as convenience, in which you may use to make purchases. Debit cards are used in place of checks. Instead of writing a check to make a purchase, or pay a bill, you can simply use the debit card instead. Many debit cards also have a function that is considered credit. However, you will only be able to spend what is available through your bank account.
The next credit card option available for individuals that do not have optimal credit is the prepaid credit card. There are numerous companies that offer this type of convenience. You will be required to deposit a certain amount of money on the prepaid credit card and then load it with an additional amount in order to use it. With this type of credit card, you do not accumulate debt as you only spend as much as you load on it. Furthermore, there are no minimum payments each month. However, you may have to pay a small service fee each month to enjoy the services offered with the prepaid credit card.
The last credit card for bad credit is the secured credit card. This operates much like a prepaid credit card. You will be required to deposit a certain amount of money to open the service with the credit card, and that deposit serves as the line of credit. Many secured credit cards often report to credit agencies. This makes this card an excellent choice for establishing credit when your overall credit score is quite low.
Kerry Hedden is one of the owners of [http://www.weoffercreditcards.com/] and believes that everyone should have a credit card and use them responsibly. That is why you will not only find the best credit card offers on our site but great articles and advice for using them wisely. We offer 100% original and free content articles [http://www.weoffercreditcards.com/article.php] that may be used and published.
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