Choosing a Bad Credit Credit Card
February 13, 2008
In a perfect world, we would all have perfect credit and the best credit cards available. We don’t live in a perfect world and many consumers who have had bad credit histories in the past may find it impossible to get low interest, top of the line, credit cards. When a consumer simply must have a credit card, perhaps for work or travel reasons, they may be faced with getting what is known as a “bad credit” credit card.
Generally speaking, these are either secured credit cards or unsecured. Secured requires the consumer to place cash into an escrow account or type of account that the lender can get to. The credit limit is often set by the amount of the deposit. Consumers use the card for purchases until the limit is reached. They then will make payments to reimburse their line of credit.
Unsecured credit cards do not require a deposit. They may, however, charge extra fees, due to the increased risk that lenders take on.
The majority of “bad credit” credit cards will charge some form of setup fee and may also charge annual fees. These charges vary from card to card and the interest rates will vary also. Consumers who need one of these cards should first do some research to find the best deals that they qualify for. This can save on interest rates as well as those added fees.