While consumers with established credit histories may prefer unsecured credit cards, secured credit cards are the way to go if you have limited history or poor credit. If you are able to fill out a credit card application and spare at least $50 for a secured credit card deposit, you will find limitless online credit cards and secured credit card options with a simple web search.
Visit the credit card chaser for an organized and complete listing of the secured credit cards with the most attractive features.
Many credit card companies know the risks that come with offering unsecured credit cards to consumers that do not have good credit. Just as homeowners with lower credit ratings are required to come up with sizable down payments, guaranteed credit card applicants are often consumers that are paying for being less-than-savvy when it comes to credit ratings.
Although having a credit score below 500 points is obviously bad for you, credit card issuers are somewhat more subjective. Some banks will issue an unsecured credit card to a consumer with a terrible credit history, but usually when the company anticipates making money through a high APR and excessive fees.
How can consumers with bad credit improve their scores with secured credit cards?
In order to improve or maintain your credit score, you will need to work with creditors that report your payments to the three major credit-reporting bureaus. Unlike title and payday loans that are heavily marketed to those with bad credit, credit cards of all types are recorded in your credit files. The U.S. Treasury Department has sponsored a website that educates consumers on credit in a lighthearted and interactive manner.
For every timely payment made to your company, your credit score will improve by a few points on average. Of course, there will be some months where you will not see a noticeable difference, at least right away. It is not just your repayment history that will boost your overall credit scores. As your trade line ages, your credit limit increases and your utilization rate remains stable, the value of your older trade line will become less significant.
Secured cards often come with lower initial credit limits when compared to other personal credit cards. Although this might appear to be a hindrance, it might actually prevent you from going into debt.
Are secured credit cards better for building credit than secured credit cards?
Only the name of the creditor, your credit limit, utilization level and payment dates will appear on your credit reports. Potential creditors reviewing your credit reports will have no idea if you have an unsecured or a secured credit card.
You can benefit from being approved for a secured line of credit just as much as you would with an unsecured credit card. The best way to know exactly what is being recorded in your credit files is to follow the instructions posted by the Federal Trade Commission.
Can you be denied for a secured credit card?
Credit card companies have the right to deny any application, for any reason, as long as they do not discriminate against consumers under any federally protected statutes. If you are denied for a credit card, you have the right to request the reason for your application’s rejection in writing.
You may also have your secured credit card application denied if you owe money to the credit card company. Even if you do not believe that you ever had a line of credit with the company that you applied to, realize that credit card issuers and banks merge and buy each other out all the time. Although many credit card companies deny having internal blacklists, they can take steps to protect themselves from further loses. This includes preventing delinquent customers from being approved for a new credit card.
Being denied for one secured credit card will not prevent you from being approved for another. You might not have a credit score high enough to be approved for a particular credit card, however, you may be able to apply for a different card with the same issuer and be accepted.
To review online credit cards and qualify for a secured credit card, use the credit card finder tool now!
- What are some unsecured credit card companies?
- Where can I compare secured credit card options?
- What are the easiest credit cards to qualify for?
- What websites will allow me to compare secured credit cards?
- Where can I find unsecured credit cards for people with bad credit?
- Are there any department store credit cards that approve poor credit?
- Where do I find business credit cards for new businesses?