Apr 13

Credit Cards for Bad Credit

Rebuilding your credit with a credit card is a great option!

If you are looking to improve your credit or build up new credit, credit cards for bad credit can be a great way to acccomplish just that. We have several options for you to chose from, including unsecured bad credit cards or secured ones if you are trying to rebuild a tarnished credit history. Remember, making payments on time, and not maxing out your cards is a great way to build up some good credit quickly. It is never too late to get your credit situation in order.

One of the easiest ways to start rebuilding good credit is to get a credit card and begin making regular payments on it. While the options for credit cards are limited when you have bad credit, that doesn’t mean that you cannot get a card to improve your credit rating. While the options for an unsecured credit card are limited with bad credit, anyone can be approved for a secured card, and in many times cases those can be better as they provide you with a top level bank to work on your credit with.

Often people ask what is an unsecured credit card for bad credit? Unsecured means that you pay no deposit on the credit balance. You do have to be careful with these though, there are some cards out there who will tell you that they are unsecured, but they eat your balance up with fees. I have seen some that approve people for an ‘unsecured’ credit card for $300 and then use two-thirds of the balance up with fees to get the account opened. In those cases, most people would be better off going with a secured credit card.

What is a secured credit card? Simple, a secured credit card is one that almost anyone can be approved for. You make an opening deposit equivalent to the credit limit that you want. You then pay your bill just as you would any other, while they have your deposit on collateral in case of default. People often get these confused with prepaid cards, but there is a difference. Secured credit cards report on a regular basis to the major credit bureaus, providing you with good credit that you need to rebuild your finances. Prepaid credit cards on the other hand just work like a debit card and offer no advantages when working on improving your credit rating.

Most credit card companies do offer a secured card though sometimes they are not very obvious; usually they provide you with the option on the decline of one of their unsecured cards. If you have a particular bank that you favor for credit cards, it may be worth it to look into that option and see if they do offer one. You could even call them and ask to see.

The great thing about secured credit cards is that often times if you keep them in good standing, they will turn into unsecured cards. These can be a great way to quickly rebuild your credit and get it so that you can start to enjoy the things in life that you could not before. Great credit makes obtaining things like auto loans and mortgage loans not only easier, but more affordable. The better your credit, the lower your interest rate, so making sure you have good credit can turn out to be a very smart financial decision if you have a purchase coming up soon that will require a loan.