Bad Credit Credit Cards

June 28, 2012 by  Filed under: Credit 

If you have had credit issues in the past, you know that rebuilding your credit can be extremely difficult. You need credit to reestablish a good payment history, but with bad credit it is nearly impossible to be approved for a new credit card. While many cards with great offers and helpful incentives will turn up their nose to those without a 700 or higher credit score, there are some cards that cater to those who haven’t had the best credit history, including some MasterCard and Visa cards.

Low Limits

Cards being targeted toward those with bad credit tend to have low limits, most fewer than five hundred dollars. This gives the consumer a chance to show a good payment record, without the risk of falling into larger debt. The credit companies protect themselves from those with bad credit histories by offering these lower limits.

High Interest Rates and Fees

“Bad credit” credit cards also tend to have relatively high interest rates. While most regular cards offer interest rates of roughly 13%, “bad credit” cards can have varying APR’s up to and above 25%. On top of these high interest rates, these cards often have unavoidable annual fees. Some annual rates can be waived for some period of time or when certain criteria are met, but “bad credit” cards do not usually give that option.

Specific Cards

One of the better companies for a mild annual percentage rate, and some nice extra features is Citi. Many of the Citi cards are designed for people with limited or poor credit history. They often include cash back bonus that rival higher quality cards. These cards often carry an APR of around 23%, and occasionally have an annual fee as low as $25.

Probably not as well known as Citi, Orchard Bank offers great features for someone looking to budget and improve their credit score. One of these features is text and email updates on spending and payment due dates. A drawback is that Orchard Bank cards do not offer cash back bonuses, and have annual fees as high as $60. The percentage rate on these cards is about 25%.

Several other companies offer “bad credit” credit cards, and they are all different just like with a typical credit card. They have different fees and terms and it is best to compare the rates and services and find the one that fits your needs.

Watch Out for Imitations

Among actual credit cards, there is a trend of prepaid cards targeted toward the unbankable or those with poor credit. They are often branded with major credit company logo’s giving consumers the false sense that these are actual cards and not a debit card or prepaid card. The prepaid cards require no credit approval since you are only allowed to spend the money you deposit. They act more like a bank or debit card in that you deposit money to the card and can only spend the money you have available. There is no line of credit given, but prepaid cards often charge you fees to access your own money. While these cards can help in not carrying around cash, budgeting, and paying online, they will not benefit your credit score in any way.

Debra Lee Dragon is a freelance writer providing content for CardGuys.com- a site that helps consumers find the best bad credit credit cards and balance transfer offers. Find and apply for a credit card that best meets your needs, today!

Article Source:
http://EzineArticles.com/?expert=Debra_Lee_Dragon

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