Unsecured Credit Cards For Bad Credit
In the past, unsecured cards for people with bad credit were hard to find. Because of a steadily improving economy, these cards have emerged in the market for credit products offered to less-than-perfect borrowers.
Many people apply for unsecured cards that require a good credit record. They are frustrated when they are rejected.
Every time an application is completed it results in someone checking your credit. This can torpedo your credit scores.
There are different kinds of cards you can get even if your credit is terrible. Some banks issue credit cards with a deposit from the borrower.
This secures the account with collateral that can pay off the credit card’s balance in case the borrower fails to pay. Many people with bad credit use secured credit cards to rehabilitate their credit profile.
There are also cards commonly referred to as prepaid credit cards. For someone who is unable or unwilling to place the relatively larger deposits required for secured cards, these may be worthwhile. Read about how they work so you can understand their limitations before purchasing them or trying to use them to rebuild your credit profile.
Unsecured credit cards for bad credit are available. You will learn how to find the best cards for borrowers with bad credit.
Should You Get A Secured Or Unsecured Card?
Getting a card with bad credit isn’t always difficult. It’s easy if you’re willing to place a deposit with the bank giving you the card. That’s one powerful secret to rebuilding credit. The card you’ll be offered is secured by your deposit. This deposit is usually equal to the amount of the card’s credit limit. Secured cards are almost always approved. This kind of account is intended for people with damaged credit, even bankruptcies.
Many people with bad credit don’t want to deposit money to get a card. They keep applying for unsecured credit accounts. These are cards that don’t require any deposits to be approved. They charge fees and high interest because of the borrower’s poor credit. But they don’t require a deposit. This is why they’re called unsecured credit cards for bad credit.
Submitting many applications is bad for your credit profile. It’s futile and can actually lower your credit score. This is because each time your credit is checked it’s counted as a credit inquiry on your report. Too many inquiries is viewed negatively by creditors. Someone looking everywhere for credit approval appears desperate. This makes it more difficult to get an unsecured credit account approved.
This doesn’t mean unsecured credit cards aren’t available to you with a bad credit history. It just means that you’re making it more difficult to be approved. You must go about it the right way. Being smart about the credit cards you’re trying to get is the key to saving money and rebuilding your credit profile.
Compare Secured and Unsecured Credit Cards
Knowing the differences between these types of cards makes it easy for you to compare them. The secured card requires more money up front. Many people don’t want them. But this kind of simple thinking is often a mistake. The money you place with the bank will eventually be refunded to you.
Your deposit is returned after you prove that you’re able to pay the account on time. Usually this takes 12 months of payments on the credit card. And when you close the secured account the company returns your deposited money to you.
Consider what you’re getting for your money with an unsecured card. Unlike most secured accounts, unsecured cards require application fees. They also impose annual fees and higher interest rates. These costs add up.
First year fees to get unsecured credit cards for bad credit are often more than they are for secured cards. And interest rates on subprime unsecured cards are usually higher than they are for secured accounts.
When you look at it this way, the secured card may end up costing you less than the unsecured credit card will, despite your bad credit. If you still want to get an unsecured card offered to borrowers with poor credit, here are some to compare:
Credit One Bank’s Visa Platinum
The Credit One unsecured credit card has a good thing going for it: It reports your payment history to the major credit bureaus. With on time payments being consistently reported, you’ll see your credit profile improve steadily over time. Learn more at http://www.creditonebank.com
You’ll find few credit offers that have interest rates and fees as unfriendly to borrowers with poor credit as this one. However, Credit One is respected and operates from its headquarters in Nevada. Unlike some bad credit credit cards reviewed on the web, the bank is well established.
This brings up an important point to watch out for: Some credit offers appear to be from offshore companies. If you live in the U.S. then you may want to stick with U.S. based credit companies. This way you have consumer protection laws regulating banks in the United States if ever needed.
First Premier Bank MasterCard
This card helps rebuild your credit. It’s requirements are flexible and it allows a $300 credit limit. The application requires a checking account number. Most important, it reports to the three credit bureaus, Equifax, Experian and TransUnion.
What is not good is that the card carries a 36% APR. It requires an initial processing fee of $95, then $75 annually to keep the account active. Still, if you are focused on rebuilding your credit and you want an unsecured card that accepts borrowers with poor credit, this is available.
You can find out more about First Premier’s unsecured card for borrowers with bad credit at http://www.firstpremier.com
Premier Forward MasterCard
This card allows a $300 credit limit. It also requires a checking account and a processing fee once you’re approved. Both cards are issued by First Premier Bank so visit its website to apply. It’s a good card for rebuilding your credit. The most important question about unsecured credit cards for bad credit is whether they report your payments to the bureaus. This one does.
Another great feature of this card is its quick application process: If you apply online the company says you should receive a response within 60 seconds. That’s called an “Instant Approval Credit Card.” For borrowers with a poor credit record this card stands with the best of them. Check it out at the link given above for First Premier Bank.