Bad credit credit cards are a special tool developed by the banking and lending industry that are designed to help consumers reestablish a good credit rating. When you have bad credit, there are many important things that you can lose access to such as a checking account, affordable car insurance, and even a job.
Good credit is needed when you want to purchase a home, buy a car, or get a loan. Unfortunately, this is a cycle that is hard to break. The more you try to get out of the situation created by bad credit, the deeper it gets. But there are credit cards available specifically for those with bad credit that can help you reestablish credit. Here is some basic information about bad credit credit cards that can help you decide if one is right for you.
What Causes Bad Credit?
There are several things that cause bad credit. Not paying minimum balances is the number one way to cause bad credit. Doing this just one time a year can lower your credit score and increase your interest rate. An increase in the interest rate can then make it even harder to pay the minimum balance the next month. Once you get a month behind, it is hard to catch up.
Another way to damage your credit is to go over your limit. Going over your limit will result in an over the limit fee which will continue to make your balance increase. Along with this, is the penalty of an increased interest rate. Adding this to the over the limit fee, and the amount already over due can send your credit score spirally. By avoiding these two things, you can avoid a bad credit score. But if you already have bad credit, there are some options available.
Credit rates are also lowered if you carry too much debt, or open and close credit accounts frequently. Rotating accounts as you try to transfer balances from one card to another may work against you in this instance. No matter how you ended up with bad credit, you can regain your financial footing.
How Bad Credit Credit Cards Work
Credit cards for those with bad credit come in all types offering options for just about anyone who needs to reestablish credit. For those who have never used credit before, have filed for bankruptcy, or have a very low credit score, these types of cards can be a life line; but, they can be costly. Bad credit doesn’t have to be a death sentence that can’t be lifted. If you use a bad credit credit card wisely and pay off balances monthly, this is a practical way to try and rebuild credit.
Vanquis Credit Card
The Vanquis Credit Card is a popular credit card for those with bad credit. It has no annual fee and a credit limit is pre-assigned and cannot be raised so that you can keep your credit in check. In addition to this, you are given 56 days to pay off your balance before interest kicks in. There are free fraud alerts and you can add an additional card holder for free. In order to apply, you must have a landline phone number, salary, and a bank account. Be careful though, the interest rate if you carry a balance is 39.9%.
First Premier Bank Gold Card
The First Premier Bank Gold Card is another card available to those with bad credit. This card can set you on the right track because at 9.9% it has one of the lowest interest rates available out of any of these types of cards. But there are many fees involved that you must be aware of. There is an Account Set-up Fee of $29.00, a Program Fee of $95.00, and Annual Fee of $48.00, a Monthly Servicing Fee of $84.00, and an Additional Card Fee of $20.00. This means that you will have a total monthly fee of $276 per month in order to have this card.
This card starts with a $250 credit limit and any type of convenience is going to cost you. For a cash advance, you will be charged 3% of the amount you request up to $10.00. If you close your account but still have a balance, you will be charged $3.00 a month until the balance is paid. There is an $11.00 fee for paying through an automatic withdrawal and a $25 fee for requesting a credit increase. If you want your cards sent priority mail there is a $35.00 fee for this. Checking your account online will cost you $3.95 each time.
Prepaid Credit Cards
Another type of card available is a prepaid credit card. This basically works like a debit card. You load the card with a certain amount of money and that is the money available to you. You cannot spend more than you have put on the card and there is no interest rate. It just gives you the convenience of a credit card and allows for direct deposit to the card.
How To Know If These Cards Are Right For You
If you are looking for a credit card and you have bad credit, there are still choices available. You can use the free credit card chaser on this page right now to compare different types of credit cards and see what they have to offer. There is no fee attached, so you have nothing to lose and good credit to gain. Don’t let bad credit stop you from getting a credit card. Use our free credit card chaser right now!
- Why are some credit card companies reducing credit limits?
- Are first credit cards important for credit history?
- Where can I get bad credit secured credit cards?
- What Are Some Easy Ways to Improve My Credit Score?
- Monthly Statement
- What is a credit card?
- What percentage of your credit card limit should you use?