What are bad credit cards?
Bad credit cards have specific requirements that are suitable for people with bad credit. Some bad credit cards are secured, which means the card holder would need put it in a certain amount in his savings account as deposit or as security for his debts.
Therefore, the credit card company is assured that in case he fails to keep up with his credit card bills, the money he deposited can be used to pay off his dues. Some are unsecured meaning you are given a credit line much like a regular credit card.
The only difference is that most unsecured bad credit cards have small credit lines and higher than normal interest rates.
The good thing about both of these cards is that they are easy to get approved for, report to the credit bureaus, and with a good payment history the credit companies will increase the lines of credit that you are approved for.
Coins Are they really worth taking?
Bad credit cards can be used as a tool in rebuilding credit or improving one’s credit score. The important thing to remember is to be aware of the charges and to be consistent in submitting your payments. With this in mind, it is important for your, the card holder to remember to charge only the amount that you know you can pay back in full by the end of the month. This way, paying the interest is avoided and your credit history is protected as well.
Can you really improve your credit score with a bad credit card?
Yes you can, but you need to make sure your credit card has a few choice features. It is important to find a credit card company that reports your payments to the three major credit bureaus regularly. It is important to note that not all credit cards companies provide this feature. Look for one that reports to the credit bureaus and that offers and instant upgrade on the credit card you use. This means, after a year or so of keeping up with your payments, you should be eligible to own a standard credit card with better rates.