Secured Credit Cards for Bad Credit
A secured card might be one of the best kinds of credit cards for bad credit or no credit at all. If you have had credit difficulties in the past, or if you’re just starting out, a secured credit card might be your only hope. Basically, the credit card is linked to a bank account with money in it, usually a few hundred dollars. The credit card company uses this money as collateral or as a security deposit. The amount you can charge is usually a percentage of the money you deposit.
But why would you need a credit card if you have money in the bank? Well, it’s all about the credit reporting agencies – the credit card company reports your positive credit activity, which will help your credit score. A simple savings or checking account, on the other hand, will have no affect on your credit. The following Web site provides information on credit cards for bad credit: www.askmrcreditcards.com.
Drawbacks of Credit Cards for Bad Credit
Credit cards for bad credit are not all great, but they might be the only option for someone trying to improve their credit score. Many credit cards for bad credit often include a yearly membership fee, an application fee, a high APR, and some have credit limits of only $100 or $200. Once you’ve used your secured credit card responsibly for several months, you might be eligible for a better credit card with no annual fee, a low APR and a higher credit limit.
Using Your Existing Credit Cards for Bad Credit:
Sometimes the best credit cards for bad credit are the ones you already have. If you still have open credit card accounts with available balances, you can use them to help rebuild your bad credit score, as long as you use them responsibly. The following Web site provides many helpful tips on many credit issues including credit cards for bad credit: www.myfico.com.
Beware of Scams Involving Credit Cards for Bad Credit
Many companies offer credit cards for bad credit, but not all those companies are trustworthy. A reputable company will accept your application by mail, Internet or toll-free number. If the company you’re considering requires you to call a 900 number, find another company! There’s no reason you should have to pay for a phone call just to receive an application. A few companies even require you to call a second 900 number to get more information. Bottom line: if you have to pay just to apply, choose another card.
Companies That Offer Credit Cards for Bad Credit
Though there are numerous banks that issue credit cards for bad credit, the following three banks are highly reputable and should be good bets for secured cards.
- Wells Fargo is one of the reputable banks offering secured credit cards for bad credit: www.wellsfargo.com
- Bank of America’s secured card give you another reputable option: www.bankofamerica.com
- U.S. Bank also offers credit cards for bad credit: www.usbank.com
By Aaron McCullough