Once a luxury, credit cards are becoming a necessary part of life. Its almost impossible to buy a plane ticket or rent a car without a card, difficult to buy anything online, and sometimes even hard to get a check accepted in person unless you have a credit card number. If you have bad credit and dont qualify for a regular credit card, what can you do?
If you have poor credit, you can choose from several types of credit cards geared toward people in just your situation. The best picks are:
* Secured credit cards. To take out a secured card, you make a deposit which acts as a security. The amount of the deposit is the amount of your credit line. You pay your bills monthly with interest, just as with a regular credit card, but if you default, your repayment comes out of your deposit. Secured cards have annual fees, so shop around for the card with the lowest annual fee as well as the best interest rate. Avoid cards that have monthly or weekly fees.
* Prepaid credit cards. A prepaid card is like a debit card: You deposit money into an account, and when you charge an item, the money comes directly out of your account. You do not pay a monthly bill or any interest. However, watch out for the setup fee and the fee you will pay to put more money into your account. If you cannot open a banking account, a prepaid credit card is a temporary solution. Best of all, you cant go into debt with a prepaid card.
* Unsecured credit cards. Unsecured cards are just like regular credit cards. The lender assesses your ability to repay debt and gives you a line of credit based on that assessment. You repay your credit card debt monthly with accrued interest. Unsecured credit cards for people with bad credit have higher interest rates because of the higher risk of lending to people with bad credit. They also tend to have smaller lines of credit, and may come with extra fees. Choose an unsecured credit card with low annual fees and no monthly or weekly fees.
Reading the fine print is even more important if you have bad credit. People with bad credit are thought to be do desperate that theyll take any card theyre offered, so unethical lenders target them. Surprise them. Be meticulous about reading all the terms of the credit card agreement, and be just as discerning a consumer as you were when you had more options. A little patience and attention will find you the credit card you need and deserve. Related Information Credit card applications ... Secured credit cards ... Bad credit credit cards ... Student credit cards ... Credit cards for bad credit ...