What You Should Know About Bad Credit Credit Cards
Getting an approval for a credit card when you have bad credit can be extremely challenging. Though most top-tier financial institutions refuse to give credit cards to people in such situations there are a few that are willing to offer credit cards. To apply for the card, called bad credit credit card, you will have to provide the company your financial information by way of an online application.
Most of the features offered with bad credit credit cards are the same as that of standard credit cards. The difference is in the interest rate, which is generally higher on a bad credit credit card. Companies also provide different types of credit cards to those with bad credit, two of which are secure credit cards and joint credit cards.
Secure credit cards
A secure credit card is an option that allows you to rebuild your credit history when you have bad credit. This is because it is secured by a certain amount of cash that you deposit in an account with the company that provides you the credit card. With this card, you will have to limit your spending to a certain amount. This is typically determined by the balance in your account. The lender may allow you to spend between 50% and 100% of that amount. You can use a secure credit card at any outlet store that accepts standard credit cards.
Joint credit cards
A joint credit card is one offered to a person who co-signs with another with a good credit score. You can avail a joint credit card by signing with your spouse, parent or sibling - who has a good credit score. One aspect to be careful of, when you take up a joint credit card is that you should make payments on time so that the credit history of the person who co-signs with you remains intact.
You can also avail a retail store credit card, also known as store card. To avail this, you will have to fill in an online credit card application provided on the website of the company of your choice.
Benefits of bad credit credit cards
Simply getting a credit card will not help you build your credit history. Making on-time minimum payments with all of your creditors and keeping account balances low relative to the credit limit are key to receiving positive marks on your credit history. Prepaid debit cards, unlike credit cards, do not provide a line of credit and do not influence your credit history. Choose from secured and unsecured credit cards, and prepaid card offers below - some of them are fee-based.
Bad credit credit cards come with a few benefits, of which the most important is that it allows you to improve your credit score. The best way to do this is to make your payments on time. Another way is to ensure that you set limits on the amount of money you spend in a month on the credit card. A secure credit card sets a limit which can help control your spending. Make it a habit of purchasing within a budget. This will help you maintain a good credit score once you re-establish it.