Unsecured Credit Cards for people with Bad Credit History
Secured vs. Unsecured Cards as explained by the Federal Trade Commission
Both secured and unsecured cards can be used to pay for goods and services. However, a secured card requires you to open and maintain a savings account as security for your line of credit; an unsecured card does not.
The required savings deposit for a secured card may range from a few hundred to several thousand dollars. Your credit line is a percentage of your deposit, typically 50 to 100 percent. Usually, a bank will pay interest on your deposit. In addition, you also may have to pay application and processing fees — sometimes totaling hundreds of dollars. Before you apply, be sure to ask what the total fees are and whether they will be refunded if you’re denied a card. Typically, a secured card requires an annual fee and has a higher interest rate than an unsecured card.
Bad Credit Cards: 7 Things You Need To Know
When you're looking for bad credit credit cards, weeding the bad credit cards from the good ones can be like searching for a needle in a haystack. With so many predatory lenders getting into the bad credit card arena, it's essential that you follow these seven rules if you want to avoid getting taken by the bad credit cards out there. The first thing you need to understand when dealing with bad credit credit cards, and bad credit cards in general, is that no legitimate credit card offer is going to require you to pay money up front. If a credit card company won't process your application without you sending in an up-front fee, it's a scam. There's no ifs, ands, or buts about it.
Opinion: Good credit history provides no guaranty a person will be regarded as creditworthy
Sometimes people do not realize companies are not just interested if you are credit risk and have a good credit history. Credit providers are also concerned they will benefit from borrowers. Therefore quite unexpectedly credit card provider may reject applicants with good credit record who always paid their credit card bills in full in the past. If you are likely to pay off your bill in full each month, the card provider can't charge you interest, which means making no money from you as a borrower.
Likewize, having a clean credit file due to having not borrowed in the past results in having no credit history. Under such circumstance you are just as likely to experience problems getting credit due to the absense of data in your file to judge your creditworthiness. Ironically, a lender then will simply lack evidence that you have a good record of repaying your past credits and may refuse to lend to you despite of your clean slate.
Anyway, most people experiencing problems getting a credit card are those with poor credit history rather than no previous credit history at all. A poor credit rating can be caused by a number of reasons including CCJs, failure to pay household bills, mortgage or rent arrears, loan defaults and bankruptcy.
