Inside Credit Cards

One of the most difficult parts of having a poor credit standing is the inability to take out loans and credit cards. Banks and financial companies certainly won’t lend money to people who already have a not-so-good credit history, as this only reflects one thing: a risky borrower who may not be able to pay as promised. With bad credit credit cards, however, people with bad credit are given an opportunity not just to make purchases as they would using a regular credit card, but also to improve their scores. And while it’s easy to get approved with this type of credit cards, there are several aspects that make credit cards for people with bad credit different from the regular type.

One is the pretty high interest rate. In general, you would have to pay an interest rate of between 18% and 10%, as well as an annual fee of $100. In the case you are unable to pay on time, you may be charged between $29 and $39 for late payment. Importantly, you will need to make a cash deposit before you can be issued a credit card. The amount often varies depending on the limit that the bank has given you.

Now some institutions may also have other charges and fees aside from the above-mentioned, such as a processing fee, cash advance interest rate, and a replacement fee if the need arises. This is why it is crucial that you carefully read the terms of the credit cards beforehand and make sure you agree to whatever that’s stated.

Indeed, people who want to acquire credit cards for bad credit may need to spend a lot more than they would in another type of loan or credit card. But some are willing to do so if it means building and increasing their credit scores. Also, considering the charges, it’s still cheaper and of course easier to make purchases with a card than with cash, especially during emergency situations.