Bad Credit Credit Cards

If you have bad credit rating at present, you are not alone. As a matter of fact, making credit missteps is quite common nowadays, which is why a lot of credit cardholders have below average credit scores. Having bad credit, however, does not mean that you cannot get a new credit card to reestablish your credit history. While prepaid cards are also a good option, there are bad credit credit cards that are available and they are more ideal for those who wish to rebuild their credit.

Secured Credit Card

This is probably the best choice for those who are struggling with bad credit. This type of credit card lets you set the credit limit by depositing a specific amount. This deposit serves as security for the account so that the card issuer will not face too much risk. Although you have to put money into the account, this is not necessarily a prepaid card. There are bills that you will have to pay each month just like traditional credit cards.

Unsecured Credit Cards

This credit card does not require you to make a security deposit. However, it is more difficult to obtain an unsecured credit card, especially when you have bad credit. If your application has been approved, you can expect that you will receive high interest rates and low credit limits. Oftentimes, they will start at $250, but this can be increased if you show that you can use the card satisfactorily.

What to Look for in a Card for People with Bad Credit

When searching for the right credit card for your current credit rating, it is important that you take the card as a stopgap tool. It is not advised that you use the card every time you want to make a purchase. There are a number of characteristics that you have to consider when shopping for a credit card. The first is the interest fee or the APR. Frequently, you will encounter cards that have lower rates for purchases than with cash advances. It is best that you pay off the whole balance every month and stick to this plan no matter what. 

There are also other fees that you have to take notice of. Since you have bad credit, the annual fees are generally much higher than those with good credit rating. There are also cards that apply sign up fees and program fees as well.

Credit limits are also essential when searching for a card. If you want to go for a secured credit card and you need high credit limit, you should be able to pay a bigger deposit. Take note that any money that you put as a deposit will not be available for you to withdraw. You can only withdraw the deposit if you cancel your account. Your bank or creditor will require several weeks to process your request and issue a refund.

Some cards for people with bad credit rating may also have features that are the same with those offered by regular cards. However, these features may not be too rewarding compared to the perks and qualities of credit cards for good credit. The best feature offered by bad credit credit cards is the ability to help you rebuild your damaged credit rating.