Cards for Bad Credit

Having bad credit score is no friend to loan applicants. It is equally damaging also your chances of getting approved for a credit card. However, that does not mean that borrowers with poor credit score can no longer get credit cards. In fact, bad credit borrowers can get an unsecured credit card, which is a type of credit card that does not require a cash deposit or any form of collateral.

Before getting a card though, it is significant to understand what exactly you are getting into with a bad credit card and how expensive the card might prove to be.

Unsecured Credit Cards for People with Bad Credit

As mentioned, unsecured cards do not require you to make a cash deposit or present any form of collateral as you would with a secured card or loan. In other words, the main share of the risk is on the part of the card issuer.
To waive this risk, card issuers charge higher interest rates for bad credit card users. In most cases, card issuers also offer a small credit limit to those with poor credit history. Generally, the interest rate can range between 8.5% to $19 or even more and the credit limit can vary too.

Unsecured Credit Cards to Fix Credit Score

Apparently unsecured bad credit cards may not offer the best deals out there but getting one is definitely a worthy one if you wish to effectively improve your credit rating. It is important to note that because of the interest rate and late payment fees charged on any purchases made on this card, not paying your card balance on time can easily result in a financial disaster.

Unsecured Bad Credit Card Options

Understanding what type of unsecured bad credit card you are getting is also essential. Some cards offer an annual fee or interest rate (APR) for all the purchases you made using the card, while other cards charge 0% APR but charges an interest rate on any purchase made using the card. Some bad credit cards offer 0% APR and offers reward programs for every purchase you make, while also charging an interest.

For many people, opting for a 0% APR card offers more long-term benefits but others may also find purchase-based interest a better option. Whatever suits best for you, you must keep in mind that bad credit cards are not the best deals available out there and should be used temporarily while you are still rebuilding your credit score.

Other Options

Getting a transfer balance card may prove to be a great option for you. A transfer balance credit card is a credit card into which a certain percentage of your main credit card balance is transferred. Let’s say your main credit card offers you a credit limit of $10,000 but it charges 15% interest rate. With a transfer balance card with a credit limit of $5000 and charges 7% interest, you can save 10% on interest on a $5000 credit. This may be a beneficial option for you.