Got Bad Credit? How to Increase Your Credit Score With a Secured Credit Card
If you have bad credit, you may have given up on ever getting a credit card (abbreviated "CC"). The good news is bad credit or bankruptcy will not necessarily prevent your getting a CC, they just make it harder.
Hope For Those With Bad Credit
Some charge accounts, called secured cards, are for people with bad credit. If you've had trouble getting approved for a major CC, a secured card is a viable option and will help building your creditworthiness in the long term. A secured CC is different from a regular charge card. Regular accounts extend a credit line based on your credit history. You can charge purchases up to your limit. You're basically borrowing money - getting an unsecured loan - so these cards can come in handy for emergencies. Unsecured accounts are usually issued to individuals with good credit histories and past proof of paying bills on time.
What's Bad About Secured Credit Cards
A secured CC requires you to deposit money into an account tied to the account. You can use the card to spend the amount of money in the account before your card declines. It functions similarly to debit, but builds your credit history - a debit account doesn't. Companies specializing in issuing secured CC accounts to people with bad credit do it to make money only, just like all lenders. Secured cards are a major profit source for the issuing banks.
Getting an unsecured CC with bad credit is expensive and your spending limits will be low. With the Imagine Card from MasterCard you would get a card with a $70 or a $300 credit limit and you'll have to pay an annual fee as high as $155.
What's Good About Secured Credit Cards
You get a credit line with a "real" credit card that can help build your credit. Pay your balance every month and you'll create a good lending history and you'll eventually receive offers for "real" unsecured cards. The annual fees might be dropped to retain you as a customer.
Considering the general shortage of money in today's job market, isn't it time you faced up to the reality of your situation?
Hope For Those With Bad Credit
Some charge accounts, called secured cards, are for people with bad credit. If you've had trouble getting approved for a major CC, a secured card is a viable option and will help building your creditworthiness in the long term. A secured CC is different from a regular charge card. Regular accounts extend a credit line based on your credit history. You can charge purchases up to your limit. You're basically borrowing money - getting an unsecured loan - so these cards can come in handy for emergencies. Unsecured accounts are usually issued to individuals with good credit histories and past proof of paying bills on time.
What's Bad About Secured Credit Cards
A secured CC requires you to deposit money into an account tied to the account. You can use the card to spend the amount of money in the account before your card declines. It functions similarly to debit, but builds your credit history - a debit account doesn't. Companies specializing in issuing secured CC accounts to people with bad credit do it to make money only, just like all lenders. Secured cards are a major profit source for the issuing banks.
Getting an unsecured CC with bad credit is expensive and your spending limits will be low. With the Imagine Card from MasterCard you would get a card with a $70 or a $300 credit limit and you'll have to pay an annual fee as high as $155.
What's Good About Secured Credit Cards
You get a credit line with a "real" credit card that can help build your credit. Pay your balance every month and you'll create a good lending history and you'll eventually receive offers for "real" unsecured cards. The annual fees might be dropped to retain you as a customer.
Considering the general shortage of money in today's job market, isn't it time you faced up to the reality of your situation?
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