Credit Cards With Bad Credit
If you have less than perfect credit, you may have seen ads
promising you a credit card regardless of your credit history or
job status. Most of these ads are actually for a secured credit
card, which can be a great way to rebuild your credit. Your
credit may need rebuilding if you have a history of unpaid
credit card bills, bankruptcy, repossession, or divorce.
However, you need to be aware that there are scams out there
promising a credit card for people with bad credit but not
delivering.
A Secured Credit Card
Many people do not know the difference between a secured credit
card and an unsecured card. The main difference lies in where
the money comes from when you make purchases. An unsecured
credit card is the standard card issued by most lenders. You
borrow money to pay for your products and services and then you
are allowed to pay the lender back with interest via credit card
bills. A secured credit card for people with bad credit requires
an initial deposit to set you. You deposit anywhere from two
hundred to two thousand dollars into an account before making
any purchases. What you buy is paid for using the money in your
account. So you have control of your credit limit with how much
cash you put up front.
Unfortunately, in order to open an account for a secured credit
card you must have the hundreds, or even thousands of dollars,
it takes to secure the credit. This up-front cost makes it a
prohibitive credit card for people with bad credit, who are
usually on a very strict budget as their debt takes up most of
their extra income. Along with the initial deposit, you might
have to pay application or set-up fees, and you could be charged
a fee when you make future deposits to your account in order to
raise your credit limit. These fees show up on your credit card
bills.
Credit Card Scams
There are legitimate promotions for a secured credit card out
there and you may find several on the internet if you search
reputable banking institutions for their offers. However, some
companies try to lure consumers into calling a false number. The
phone number listed in the ad is not toll- free, but is a 900
number that you will be billed for using. The scammers might
lead you to believe that you can get the secured credit card as
soon as you call the listed number. In these false ads, there is
usually no mention of set-up fees, initial deposit amounts,
eligibility requirements, or credit card bills, which will be
larger than normal due to annual fees and high interest.
How To Spot A Scam
If someone offers you easy credit with no qualifications to get
a credit card, this person or company is probably not telling
you the whole truth. Any reputable lender must check your credit
report before offering you a line of credit. This precaution is
especially true when providing a credit card for people with bad
credit. Also beware of calling 900 numbers. These numbers are
not set up to provide you with a service. They are set up to
make the company a profit and your phone bill could show a
charge up to $50 for a few minutes.