Credit Cards For Bad Credit Rating

Credit cards for bad credit rating borrowers are difficult to come by. If you’re looking for an unsecured card and your credit rating is below 620, you can pretty much cross that off your list. The news isn’t all bad, however, there are plenty of credit cards for people with bad credit ratings. Secured cards may sound ominous, but they do wonders for your credit rating. In fact, most people who qualify for a secured card, can improve their credit significantly in a twelve month period. That means in a year’s time you can apply for an unsecured card, with a better interest rate. This doesn’t apply to all borrowers, however, and some people make the mistake of thinking that credit cards for bad credit rating will fix all their problems, when in fact it can put them deeper in debt.

If you have poor credit, you’ve probably been getting offers in the mail for a credit card for bad credit rating borrowers. It’s inevitable that you’ve at least considered it. However, have you read the fine print? Many secured cards come, not only with a high interest rate, but with a lot of fees attached. There are secured cards that have an application fee. You’ll have to send in $50 just to apply for the card. Usually that is followed by a yearly fee, monthly fee, insurance fee and whatever else they tack on, in addition to the deposit. By the time the card actually comes in the mail, the fees have racked up the entire limit. You’ll have to pay those off before you can even use the card once.

The good news is that there are plenty of secured cards without all of those strings. There are even partially secured credit cards which only require a small initial deposit of $99 for a card with a $500 limit. Sometimes those cards have annual fees, but they don’t gouge the consumer. In fact, many unsecured credit cards have annual fees. Every lender has its own fee structure; it’s up to the borrower to consider if the card is worth having.

A proper secured card, which reports to all three credit bureaus, is an invaluable asset in rebuilding credit. A credit rating is 35% past payment history. By using a secured card, making the payments on time, within a 12 month period you can significantly increase your score. In fact, by increasing your credit score by just 50 points you can save hundreds of thousands of dollars on a mortgage, or just thousands on an auto loan.

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