Credit Cards for Bad Credit
I’m sure you have heard the old adage which states that having good credit is better than cash.
Many people have laughed at this old adage throughout the years.
However, there’s a lot of truth to good credit being better than cash.
Good credit can open doors of opportunities that are not available for people with:
- Bad credit
- No credit
- Not enough credit
If you are one of many hard working people who are experiencing hardship with credit, there is no need to lose sleep or stress yourself out about the matter.
Instead, start looking for ways to improve bad credit. There are options available to you help.
Medical bills, funeral expenses and college education expenses are major causes of bad credit for many people.
There are countless other reasons why people find themselves with bad credit.
Reasons Why People Experience Bad Credit
- Job Loss
- Failed Business Venture
No matter the reason for bad credit, there are solutions and ways to rebuild a credit history.
This article will provide you with insight and available tools to improve your credit score.
You will learn how to rebuild or establish a good credit history.
Credit cards are powerful tools that many smart consumers have used to rebuild and establish credit.
What is a Credit Card
A credit card is one of the most effective tools available for customers to build credit.
There are four major credit card issuers. Major credit cards are issued by Visa, MasterCard, Discover and American Express.
The condition of one’s credit will determine if a banks, credit unions or other credit card issuers issues a unsecured or secured credit card.
Unsecured Credit Card: Let’s look at an example of an unsecured credit card.
- Mary applies for a credit card with PNC bank and receives in approval without a required security deposit.
- PNC bank issues a Visa credit card to Mary with an credit limit of $10,000 based on the Mary’s credit history and ability to repay.
- Consumers with a positive credit history should expect to receive approvals for unsecured credit cards.
When banks, credit unions and other credit card issuers issue credit cards to consumers without requiring a security deposit, this is consider an unsecured credit card.
If you are a consumer with bad credit, applying for a secured credit card is the best option to re-establish a credit history.
Secured Credit Card: Let’s review an example of an secured credit card.
- Bob applies for a credit card with Capital One Bank, based on information found in Bob’s credit report, Capital One Bank informs Bob that he qualifies for a secured MasterCard credit card.
- In order to receive his new card, Bob will be required to provide Capital One Bank with a security deposit of $300 and his available credit line will be $300, the amount of his security deposit.
- With a secured credit card, consumers are required to make a security deposit in exchange for receiving a credit card.
Secured credit cards are an excellent way to:
- Rebuild Credit
- Establish Credit
- Improve Credit
When used wisely, consumers can expect to see an increase in credit scores within 6-12 months.
Lowest Fico Score: 300
Highest Fico Score: 850
- The lowest Fico score available is 300, which is not considered a good FICO score.
- The HIGHER the Fico score, the better the credit rating.
- 850 is an excellent Fico score
It is important to review your credit report on a regular basis to avoid unauthorized use of your credit. Also, a credit report will provide you insight and details of the health of your credit. There are 3 major credit reporting agencies in the U.S.
Website address: Equifax.com
Website address: Experian.com
Website Address: Transunion.com
If you are experiencing difficulties with meeting your financial obligations, you are not alone.
There are practical free steps that you can take to effectively communicate with your creditors.
It is important to contact your creditors immediately upon experiencing financial difficulties. If you are unable to pay your bills, do the following:
Income and Expenses: Review your current income and expenses to determine what you are able to pay.
- It is important to review all expenses to know exactly how much money comes in and how much money goes out each month.
Contact Your Creditors: Telephone ALL of your creditors and advise them of your financial situation.
- It is important to be transparent with your credit by letting them know exactly where you stand financially.
10 Banks that Issue Secured Credit Cards
- PNC Bank
- Bank of America
- Capital One Bank
- USAA Savings Bank
- Navy Credit Union
- Wells Fargo Bank
- U.S. Bank
- Andrews Federal Credit Union
- Pentagon Federal Credit Union
- SunTrust Bank
Rebuilding Credit Wisely: How to Choose the Best Secured Card
It can be a challenging task to rebuild credit. However, do not allow your current credit history to cause you to become desperate in your quest to rebuild credit. Here are some helpful credit card tips to remember:
- Bank or Credit Union Brand: Choose a bank or credit union that is well know that has a history of providing quality customer service to its clients.
- Fees: Avoid banks and credit unions with excessive secured credit card fees, shop around and see what your options are.
- Paying Your Bill: To rebuild credit or establish credit, it is essential that you pay your monthly credit card bills on time. Credit card bills should be paid on or before the statement due date each month.
- Secured Credit Cards
- Credit Cards
- Test Your Credit Knowledge
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