Bad credit credit cards
Having bad credit does not mean that you are deprived from getting a credit card. Though it cannot stop you but qualifying can be a bit difficult and you would have to compromise on certain things. Here we will be focusing on the types of bad credit, credit cards people can apply, for and how can they apply and what are the advantages.
The first thing that you need to set in your mind is that you have bad credit and you will be offered a high interest and you would not get all the benefits that are available for people who are average credit.
How to get a bad credit credit card
There are a number of credit card providers that give out credit cards to people with bad credit. Moreover most of the big players in the credit card market have started offering credit cards. You should be careful in picking your deal and go through the offer carefully. You would be charged a high interest rate and the term of the card would be strict.
It is always advised that you apply for a bad credit, credit card at smaller retail stores at times they have better offers as compared to those offered by big names. You can start your search for a bad credit, credit card by approaching your savings bank or a financial institution. You can also consider approaching a credit union. If these people know you well and you have dealt with them financially in the past then they can offer you a good deal.
Once that you are approved make sure that you don't make big purchases using this card and keep it for smaller purchases. Also make sure that you make the minimum payments towards the credit card so that your account is reported to the credit bureaus and your credit score can improve.
When it comes to applying for bad credit, credit cards then you should be aware that there are three types of credit cards that you can apply for. Your first option can be a normal unsecured credit card, the second a secured credit card and the third a pre-paid credit card. However, before applying confirm with the provider whether your account will be reported to the credit bureau or not.
Types of bad credit credit cards
As mentioned there are three types of bad credit, credit cards. Let us see these in detail:
Unsecured credit cards: These are the normal credit cards that are approved based on your credit score, income, employment stability and other financial basis. Since you are suffering from bad credit you would be charged with a high interest rate and you would also have to comply by the strict terms of meeting the payment towards your credit card account. These types of credit cards are a bit difficult to qualify for as compared to secured and pre-paid credit cards.
Secured credit cards: As the name indicates the secured credit cards are secured against a collateral either in the form of a fixed deposit or a savings account. Usually people prefer to have a secured credit card against a savings account. You are charged an annual fee and an interest rate on this card, which can easily be met. There are no strict rules for qualifying for these cards and you can easily get this card with your local savings bank. However, before taking this card make sure that your account would be reported to the credit bureaus.
Prepaid credit cards: These credit cards require pre deposit of money before they can be used. The limit of your credit card is same as the mount of money that you have deposited. These credit cards are handy and if you run out of money you can refill these cards at any time. Most of these credit card providers offer online services and make it easy for the customer to use these cards. But most of these cards do not have account reporting so make sure before you apply for one.
Increasing your chances of qualifying
Usually people wish to qualify for unsecured credit cards even if they have bad credit, as they are sure that once they start making payments on time they would be given a better offer and their credit limit would also be increased. This is true but only if you are able to meet the payments on time.
To increase your chances of qualifying you would have to show your financial stability in form of assets, income and employment stability. Apart from this you can even ask a friend or a family member who has a good credit score to co-sign the credit card for you which can increase your chances of qualifying.
Once that you start making payments towards the credit card account you would see that your credit scores would improve gradually.
Examples of Bad credit credit cards
Unsecured bad credit, credit cards:
First premier bank gold mastercard: They offer regular APR of 9.9%, annual fee of $48, monthly reporting to bureaus and you can receive 5% credit to your account balance on all payments for 12 months.
Orchard Bank Classic Mastercards: They offer regular APR of 14.90%; annual fee: $0-$79; monthly reporting and online access to your account.
Secured bad credit, credit cards:
New Millennium Bank Secured Platinum Visa® or MasterCard®: They offer regular APR 19.50%, annual fee of $59, monthly reporting to bureaus.
UltraVX Visa®: They offer regular APR of 14.90%, annual fee of $83.40 or monthly fee of $6.95 and monthly credit reporting.
Pre-paid credit cards:
AccountNow® Prepaid Visa® Card: They offer monthly fee of $4.95, re-load with a $10,000 balance limit and credit reporting.
Bank Freedom Prepaid MasterCard® : They offer 100% Guaranteed Approva and low fee.Other Articles
