Credit Card for Bad Credit
Credit card for bad credit is a card sought by people that are commonly rejected because of bad credit rating.
How does an individual get a bad credit rating in the first place? You may ask.
A person must have built his credit rating already when he has taken mortgages or loans from the bank in the past.
The rating is good if he is able to pay the bills on time, but in the contrary, it is bad if he did not.
Usually, applicants will have difficulty in getting an approval for a credit card from traditional card companies if they have a bad credit.
The reason is that these companies would not risk letting the people be in debt again.
However, some card issuers nowadays have their own standard in looking at what is a good score.
They can consider a not so high credit rating to be adequate in providing you with credit card for bad credit.
Although these credit card companies will still check with the credit bureaus, but their assessment would only be for gauging the credit limit that will be extended and for the rate of interest.
What are the Credit Cards for People with Bad Credit?
Many may lose hope applying for credit card, with the thought that their application will just end up rejected again.
However, bank experts suggest that there are still possible offers that you can grab to have a credit card.
One way is to apply for secured credit cards.
Secured Credit Cards
Credit Card for Bad Credit
These cards allow you to make a deposit as security. A lender will then issue a card with a credit limit that is equal to your deposit. You can start using the card, and pay the balance of your purchases as they become due.
These are the best credit card for bad credit. With a secured credit card, you can start rebuilding your credit history while enjoying all the convenience of having a card.
Proper management of secured credit cards requires understanding of their features. These features include:
- The Fees – Expect fees for these cards such as application fee, annual fee, and expedite fees.It is necessary for the cardholder to know where the issuer will be charging the fees.The fees can be charged from the deposit or from the card.
- Grace Period – Just like with an unsecured cards, the cardholder is entitled for a grace period when he is paying the full amount of his balance every month.
- Interest on Security Deposit – Cardholder can expect that the security deposit is earning an interest just like an ordinary savings account.
At a certain point, a person with a secured credit card should check whether the card company is sending monthly reports to the credit bureaus.
Since one of the intentions of having the card is rebuilding the credit rating, it is crucial that the card company should be updating the activity of the cardholder every time.
Some of the major credit card issuers that are offering secured credit cards include Orchard Bank, Capital One and Citi.
Credit card for bad credit is great means of providing opportunities for people with poor credit in regaining their confidence and rebuilding their credit credentials.