Credit Cards For People With Bad Credit
If you have less than perfect credit, you may have seen ads promising you a
credit card regardless of your credit history or job status. Most of these ads
are actually for a secured credit card, which can be a great way to rebuild
your credit. Your credit may need rebuilding if you have a history of unpaid
credit card bills, bankruptcy, repossession, or divorce. However, you need to
be aware that there are scams out there promising a credit card for people
with bad credit but not delivering.
A Secured Credit Card
Many people do not know the difference between a secured credit card and
an unsecured card. The main difference lies in where the money comes from
when you make purchases. An unsecured credit card is the standard card
issued by most lenders. You borrow money to pay for your products and
services and then you are allowed to pay the lender back with interest via
credit card bills. A secured credit card for people with bad credit requires an
initial deposit to set you. You deposit anywhere from two hundred to two
thousand dollars into an account before making any purchases. What you
buy is paid for using the money in your account. So you have control of your
credit limit with how much cash you put up front.
Unfortunately, in order to open an account for a secured credit card you must
have the hundreds, or even thousands of dollars, it takes to secure the credit.
This up-front cost makes it a prohibitive credit card for people with bad
credit, who are usually on a very strict budget as their debt takes up most of
their extra income. Along with the initial deposit, you might have to pay
application or set-up fees, and you could be charged a fee when you make
future deposits to your account in order to raise your credit limit. These fees
show up on your credit card bills.
Credit Card Scams
There are legitimate promotions for a secured credit card out there and you
may find several on the internet if you search reputable banking institutions
for their offers. However, some companies try to lure consumers into calling a
false number. The phone number listed in the ad is not toll- free, but is a 900
number that you will be billed for using. The scammers might lead you to
believe that you can get the secured credit card as soon as you call the listed
number. In these false ads, there is usually no mention of set-up fees, initial
deposit amounts, eligibility requirements, or credit card bills, which will be
larger than normal due to annual fees and high interest.
How To Spot A Scam
If someone offers you easy credit with no qualifications to get a credit card,
this person or company is probably not telling you the whole truth. Any
reputable lender must check your credit report before offering you a line of
credit. This precaution is especially true when providing a credit card for
people with bad credit. Also beware of calling 900 numbers. These numbers
are not set up to provide you with a service. They are set up to make the
company a profit and your phone bill could show a charge up to $50 for a
few minutes.
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