2 Options to Consider

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					                               2 Options to Consider

Recovering from a poor financial reputation is not supposed to be easy, but applying for
loans and credit cards with bad credit is no longer the doomed act of over-optimism that
it once was. The availability of credit cards with bad credit is a surprise, but is also a
valuable way for people to restore their credit status.

Not only is fast application approval possible (given the right circumstances, of course)
but credit scores can be increased, existing debts cleared, and entitlements enhanced. It
means that in about 2 years, individuals can see their status return to normal, and credit
card companies begin to consider them trustworthy for regular cards.

Opting for a Secure Card

The first option to consider when seeking credit cards with bad credit is what is known as
a secure card. Strictly speaking, of course, this is not really a credit card. This is because
the money being spent has already been paid onto the card, but it does drastically reduce
the degree of trouble that the card user can possibly get into.

For example, because the funds available on the card has been deposited by the
applicants in advance, payment for the money spent is already covered. So, there is no
actual credit being extended, and therefore no debt risk. This makes fast application
approval all but a certainty. However, there are other conditions to consider.

These prepaid cards are usually restricted in size, usually between $1,500 and $3,000. By
setting tight conditions, the credit card companies can control the spending done, which
in the long run only helps the applicant. After all, even when the loan limit is set by the
user, the high interest rate ensures that issuers make their money.

Consider an Unsecured Credit Card

A second option when seeking a credit card with bad credit is an unsecured card. Like a
regular credit card, this provides a certain amount of funds on credit, with money then
made through the interest rates charged. But with something like a bad credit score
hanging over their heads, applicants can only access small amounts of cash.

Often, these cards have limits of only $300. This is not much, but it at least provides the
starting point to making a change in our lives. And while fast application approval cannot
be guaranteed, they are very manageable and can slowly make a contribution to
rebuilding a credit reputation.

It may take a little time but when the credit score has improved sufficiently, the interest
rate charged by the credit card company falls and the credit limit increases, eventually
making $10,000 cards available again.

Increase Limits by Improving Ratings
While it is possible to get approval on a credit card with bad credit, that is not to say that
some preparatory work should not go into the forming the best possible application. This
generally involves improving the credit score so that the terms of the new card are as
close to ideal as possible. But how is that accomplished?

Well, the fact is that improving a credit score rests on existing debt being cleared to some
degree. taking some simple steps to improve their status can set them up for excellent
terms. For example, taking out a payday loan to pay off one existing debt will see the
score increase, and make fast application approval more likely.

Over 4 or 5 months, this can be done a number of times, with the score going up with
each loan paid off. So, the interest rate to be charged by the credit card companies is
lower, while the card limit is increased too.

				
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posted:6/27/2012
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