Bad Credit Cards For Poor Scores
If you have bad credit, a bad credit card is a great way to build your credit back up. A credit card tailored to your bad credit will help you repair your credit and get you back on track. These cards are available but are not nearly as common as credit cards for people with good credit.
Basically, there are two types of bad credit cards. First, there are those that do not require a credit check at all. These are simply credit cards designed for people with low credit scores. They come without any perks or benefits but do require a decent credit score in order to qualify. The second kind of bad credit cards are those that do require a credit check and do require some sort of collateral. They are known as secured credit cards.
The first thing you should know about these cards is that they usually only allow you to carry a certain amount of money. Usually, a low credit limit will be around $1000. You can usually only spend what you have on this account. Some of these cards even have an annual fee, which is charged upfront and then again every month. The annual fee can take quite a bit of money out of your monthly budget. If you are working hard to fix your credit, paying off your debt will only take so much out of your pocket.
If you want to find low interest rates, go with secured credit cards. These have no annual fee and also have a low credit limit. Your credit check doesn’t even come into play when you apply for a secured credit card. This is a big advantage because it makes it easy for you to build up your credit back up to a point where you can later get an unsecured credit check. Once you qualify for an unsecured credit check, then you can get a higher credit limit.
Unsecured credit cards usually have a high annual fee and high interest rates. Some of them also require a co-signer. You don’t want a co-signer on your credit because then the lenders will end up paying that person’s bill if you don’t make your payments. On the other hand, if you have a co-signer, then the lenders will need them to make the payments if you don’t. The upside to unsecured cards is that you do not have to worry about paying a low credit limit, and you don’t have to worry about paying a high interest rate.
If you are looking for low interest rate cards, go with the top credit cards with the lowest interest rates. These will often come with excellent credit checks. They will be accepted at many locations and will offer different rewards and benefits. You want to take a look at the APR or Annual Percentage Rate. This is how much you will spend on interest during a year, and it will help you get approved if you have an excellent credit rating.
Some cards will offer you a secured loan instead of an unsecured one. If you have a house or some other form of collateral, then this can be great because the lender will take care of any risk if you default on the payments. The downside to secured loans is that they have a high annual fee and you will pay more interest. Unsecured cards will have a lower annual fee, but you will have to pay higher interest. Both types of credit cards for bad credit will usually require that you pay your monthly bill on time and you will have to make sure you make your payment before the due date.
It can be confusing to figure out bad credit cards for bad credit scores, but it can be done. You will want to compare all of the cards that are available so that you know what you are getting and what you need to do to help your credit score. Credit cards for bad credit scores can make all the difference in your financial future if you take the time to find one you like and use it responsibly. A little effort and patience go a long way in this world!