Credit Cards for People with Bad Credit

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You might think that there is a catch if any financial institution wants to help you out, even though your credit is bad (or non-existent). The truth of the matter is that while the options may be different when it comes to bad credit credit cards, there is really no catch at all.

For the sake of clarity, when we talk about bad credit, we’re talking about credit scores that fall below 630 (when the range of the score is 300-850). A lot of the time the same options that are available for those who fall into this category are the same ones that are easier to embrace for those with no established credit history as well.

The Basics of Credit Cards for People with Bad Credit

There are three approaches that are common when one has bad credit and wants to get their hands on a line of credit. Secured credit cards, store credit cards, and student credit cards. Below you’ll see how each one works so that it can help you make an educated decision as to which one is right for you.

· Secured Credit Cards (The Top Choice)

A popular option among those with bad credit, secured credit cards require an up-front investment (in the range of $200-$500 for most cases). This is the better option as it does allow you to secure your credit line with the bank and it opens up the door to future opportunities provided that you make your payments on time and don’t let yourself slip through the cracks.

· Store Credit Cards

This is often found at your local department store (as well as grocery stores and electronics stores) and is offered directly by the store itself. The downside to these types of credit cards is that they usually do come with a higher interest rate than other types of cards. However, they do offer easier approval than others.

· Student Credit Cards

This is a type of card that is aimed towards students who have little or no credit history established, and they’re also known to come with a higher likelihood of approval. The credit limit is usually lower than other types of credit cards and the lender also provides access to financial education resources to help borrowers better understand the world of credit.

The Advantages of Bad Credit Credit Cards

Even though it might not seem as ideal as the options that are available if you had an excellent credit score, there are still some great benefits that you will be able to embrace by going this route.

· An opportunity for a second chance is provided.

It’s like having a new leash on life. As long as you use this opportunity wisely, it could be what takes you to an improved level of financial security. However, if you don’t, it could put you into an even bigger predicament than you’re currently in.

· Have a financial cushion when you need it.

In a world where we have been shown that the unpredictable happens, having access to a line of credit may be the difference between survival and struggle. Just because you may have made some poor choices in the past, or you haven’t taken the time to build your credit, doesn’t mean that you should have to suffer.

· The opportunity for a higher credit line may be made available.

Many credit card companies used these types of cards as a starting point for those that they finance while minimizing potential liabilities. Over time, you may be provided with the option to upgrade your card (and even get your deposit back on secured credit cards).

Just make sure whichever choice you make, you use it to your advantage. This can be done by setting up automatic payments for your card as well as being completely aware of your spending so that you can embrace rock-solid financial planning. Also, take advantage of the financial education resources offered by the lender to ensure that you’re on top of all of the opportunities that await you when it comes to improving your credit score for the long-term.