Saturday, 15 January 2022

Credit cards for Bad Credit: Prepaid, Secured and Unsecured cards

Credit cards for Bad Credit: Prepaid, Secured and Unsecured cards
16 Sep

Hi! My name is Hilary Russo, and I am your guide on a journey around Credit-Landcom

I'd like to welcome you to our section dedicated to people with bad credit Here you will find a selection of credit cards that are considered best for people rebuilding their credit situation Credit Cards for Bad Credit! Remember the times, when any credit score could get you a credit card with high credit limits, low interest rates, and great rewards? Those times are long gone, and today you have to work twice as hard to get a credit card This is especially painful for people with bad credit, because banks have become extra cautious to whom they lend money It is difficult to admit that the main reason your credit score was ruined is because of your mistakes in managing your finances

Late payments, delinquencies or unexpected life changing events are the major contributing causes to bad credit Admitting that you have a bad credit is the first step to recovery The 2008 recession left millions of people with ruined credit history One of my friends had lost his job in the last Recession and run up $25,000 in a credit card debt, trying to stay afloat while being unemployed Recession has turned his life upside down, plunging him in to debt and foreclosure

Two years later, after finding a job and settling his debt he tried to apply to several credit cards but was denied because his credit score was at its lowest To help him out, I suggested that he should consider credit cards for people with bad credit There are several types of these cards and each has its own purpose: The Prepaid Debit Cards are a very useful invention for several reasons Although they do not help you with improving your credit score, because they do not report to major credit bureaus, you can get the card without the need to verify income or your credit history Most importantly, prepaid cards teach you how to make timely payments, and allow you to make purchases whenever a credit card is required

Prepaid cards should be considered as a good practical lesson in using and managing your money with a card, which will become priceless when you become eligible for a credit card Unlike a prepaid card, Secured Credit Card is an actual credit card that is subjected to an interest rate on amount you spend and not everyone can get the card, because it requires approval by the bank The only similarity with prepaid cards is that secured credit cards require a onetime deposit when you open your account The bank will open a line of credit equal to the sum of your deposit Some banks may even give you higher credit limit exceeding the deposited amount

Should you decide to close the card when your account is in good standing The deposit is refundable Although secured credit cards require money collateral to open the card, — they help you improve your credit score They do this by reporting your timely payments to the credit bureaus This credit reporting feature is their main advantage over the pre-paid cards

Additionally, if you pay on time, you can avoid paying high interest rates, and steep late fees This is why it is important to develop timely payments habits before applying to a secured credit card If you do a good job in managing a secure credit card, your credit score may somewhat improve and the credit card company may graduate your account to a classic unsecured credit card, a regular credit card that really helps to improve your credit score The main advantage of a regular credit card is that it is an unsecured credit card – which is a big deal in the eyes of three major Credit Bureaus This is very important, because the type of credit you have plays a big role in your credit score

Regular credit cards are the best type of credit card of all three types we discussed, for improving your credit worthiness Although classic credit cards usually offer better terms than Secured Credit Cards, people with bad credit rating, may have a hard time getting a regular credit card Thankfully, there are regular credit cards designed for people with bad credit These cards do come with high interest rates, but the rate may become lower once your credit score improves, if you make your payments on time I recommended my friend to apply for credit card for people with bad credit

My advice was that the bank will typically give you 25 days grace period to pay-off the balance before the interest kicks in; so if he treats the card responsibly, and spends within his ability to repay the balance and within the card's grace period — he won't be charged late fees or interest Luckily, my friend was approved for such credit card, and after several months of timely payments, his score improved to a point when he received a new offer for a credit card with lower interest rates His new card even offered rewards, like cash back, which is another wonderful incentive to improve your credit score Although this story has a happy ending, you must agree that it's entirely up to you to improve your credit score So follow my friend, pay your bills on time, and maintain your account balance below the credit limit

You will be amazed to see your credit history improve Keep in mind, these cards for bad credit, may charge additional fees, other than the annual fee or interest rates, so you should take the time to read the terms and conditions conveniently available for every card at Credit-Landcom

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