Bad Credit? Restore Good Credit with a Major Credit Card


People with bad credit may have a limited choice when it comes to acquiring loans and credit cards. Issuers of credit cards and lending companies usually prefer applicants with good to excellent credit. But did you know that you can also use a credit card to restore a good credit standing?

Yes, a bad credit credit card is a type of card especially offered for individuals who are credit challenged. If you are not able to get approved for a regular credit card because of your current credit score, a bad credit credit card is just what you need. On this post, let’s take a look at some of the popular types of credit cards for bad credit:

Secured Credit Card. A secured credit card is much similar to a regular credit card. The only difference is that it requires the submission of a cash deposit. The deposit serves as a security for the future charges. Thus, in the event of default, the issuer can tap into the security cash deposit and use it as payment for any balance left unpaid.

This is why the credit limit is based on the amount of security cash deposit provided. For example, if you placed $300 in your deposit account, the secured credit card issuer may also provide you with an equal credit limit. In some cases, a secured cardholder can enjoy a slightly higher limit than the amount of cash deposited.

Unsecured Credit Card for Bad Credit. There is a new type of a bad credit credit card – the unsecured credit card for bad credit. As the name implies, this type of credit card is also available for people who have a low credit score or bad credit. Nevertheless, it does not require the submission of a cash security deposit.

What are the disadvantages that you can expect? Compared to a secured credit card, unsecured credit cards for bad may carry very high interest rates. The credit limit may also be limited to a low range and if you fail to comply by the terms of the issuer, the penalty fees can be steep.

However, there are solutions for these drawbacks. First, you can avoid paying high interest rate fees by using your unsecured bad credit credit card only for minimal purchases. Pay the balance in full to avoid the extra charge. Stay within your limit, submit your payments on time, and understand your issuer’s terms to avoid being penalized with fees.

Prepaid Debit Card. Another type of a bad credit credit card is the prepaid debit card. In the past, debit cards cannot be used as tools for establishing or rebuilding credit since account activities are not reported to the major credit bureaus. Today however, you can find prepaid card issuers that provide credit reporting to a major credit reporting agency.

It’s important to choose a prepaid debit card that is widely accepted. If you plan to use your prepaid card overseas, it’s best to choose a prepaid credit card that bears the VISA or MasterCard logo to ensure that your card will be recognized anywhere.

About the Author
Tara Tiemann is the credit specialist for http://www.go-prepaid.com.  Which is a resource site for people who want to live debt free! If you are on a budget, using a bad credit credit card and Bad Credit Unsecured Cards can save you big money!


About Liz Roberts

Liz Roberts is the new credit specialist for Go-Prepaid. If you are on a budget, we can get you discounted cell phone service from Sprint, Verizon and T-Mobile! NO CREDIT CHECK ! Using a prepaid services can save you a TON of money! Follow our blog to find out how!

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