 By ASAP Credit Card - Copyright © 2008
Worried
that bad credit or a lack of credit history could prevent you from obtaining a
credit card? We have good news! Credit card issuers have credit cards designed specifically
for people like you! While these cards tend to have higher rates (and additional
fees) when compared to 'standard' credit cards, they'll give you the opportunity
to build / improve your credit score over time.
Secured Credit Cards
Secured
credit cards are available to just about anyone, regardless of credit history.
That's because a security deposit is required - normally between $100 and $500 -
before you can make any purchases. Since the security deposit determines your
credit limit, if you run into a problem paying your bill at any time, the deposit
will be used to cover your obligation - securing your debt.
Although
this may not seem like a 'true' line of credit, you'll have the chance establish
or rebuild your credit history since all your activity will be reported to the
3 major credit bureaus (Equifax, Experian and TransUnion). Here's some other points
to consider:
- Interest may be paid on
your deposit - up to 4.5%.
- Cards that carry
the MasterCard or Visa logo appear like a standard card to merchants.
- Some
issuers offer double the amount deposited as the credit limit.
- Your
credit limit may be increased without additional deposits after you've successfully
shown your ability to responsibly pay your monthly bill.
- Be
aware that some issuers charge a fee to increase your credit limit.
- You
may be denied a credit card if any late payments posted on your credit report
within
the last six months.
- Some issuers
will not consider applicants with a past bankruptcy.
Secured
credit cards are a great option to help build or repair your credit history. Try
to pay more than the minimum amount due whenever possible and always make your
payments on-time. Once you've demonstrated that you can handle your credit responsibly,
the issuer may increase your credit limit without an additional deposit.
Eventually, after you've built-up enough credit history, you'll be able to qualify for a 'standard' credit card with a lower APR and no security deposit.
Unsecured Credit Cards
An unsecured credit card is a 'standard' or traditional
credit card that doesn't require a security deposit. The interest rate and credit
limit are based solely upon your credit history.
Most
unsecured credit cards are out of reach for people with poor or no credit history; however,
there are a few exceptions offered at ASAP Credit Card. While these offers still
carry higher interest rates and additional fees when compared to 'standard' credit
cards (for good credit), you won't pay a security deposit like a secured credit
card.
Prepaid Credit Cards
A prepaid credit card operates on a "pay-as-you-go"
basis and can be used anywhere credit cards are accepted. They offer many benefits,
and in most cases, are very easy to use. But be aware, not all prepaid credit
cards report your activity to the major credit bureaus. While you'll benefit from
the safety and convenience of a prepaid card, you won't be building or improving
your credit history if the credit card company doesn't report your card activity.
Luckily, many prepaid cards report your credit card activity or offer this option
for an additional monthly fee.
Our
Recommendation
If you have bad credit,
or no credit at all, try applying for an unsecured credit card first. This allows you to avoid security deposits and provides you
with a 'true' line of credit if you're approved. Since most credit card issuers will offer
you a secured line of credit if you don't qualify, you
should try for an unsecured offer (for poor credit) and only accept a secured credit card if you don't qualify.
*
See a complete list of our Credit Cards for Bad
Credit >
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