Unsecured Credit Cards: A Guide for Those with Bad Credit
Regardless of the actions that led to your bad credit, trying to find an unsecured credit card can be tough. This article, however, will make the process easier by serving as a buyer’s guide to unsecured credit cards.
Step One: Why do you need a credit card?
If you have bad credit, chances are that you got into your current situation due to some bad choices in terms of loans. Perhaps you racked up a bunch of credit card debt and declared bankruptcy. If this is the case, before you go shopping for another credit card you need to ask yourself why you need it and what you will use it for in the first place.
Will your credit card be for emergencies only? Will you never charge more than you can reasonably pay off within 1-3 months? If you answered yes to these questions, then you are in a good mental state to get a credit card, despite your bad credit.
Step Two: Know your options
Because of your bad credit, credit card offers will not be as easy to come by as they were when your credit was good. Generally, any lender who offers you a credit card will only do so if you either (1) give him a deposit, or (2) agree to high interest rates and fees.
This is why your answers to the questions above are so important. If you do not have the cash for a deposit – also known as a secured credit card – the only other option to you, an unsecured credit card, will often come laden with fine print. Before you sign anything or agree to any terms, make sure you read and understand that fine print and that you discuss it with the lender.
Step Three: Compare Deals
Finding an unsecured credit card is a lot like finding any other kind of loan. That is, the offers that you receive may vary greatly from lender to lender. When searching for a credit card with bad credit, you need to first generate a list of three to five lenders who even offer that option. Then, contact each lender for a quote. Minimally, that quote should include:
- The credit limit on your card.
- The card’s annual interest rate.
- Any fees associated with late or missed payments.
- Any interest rate penalties that will accrue as a result of a late or missed payment.
If something about the offer seems out of sorts, reject it. Also, never take an unsecured credit card from a lender who is not willing to adequately answer your questions about interest rates and fees. If the lender cannot be honest, he is probably trying to scam you.
Getting the Best Deal for You
If you have bad credit, you may find that many lenders act as if working with you to get an unsecured credit card or a loan is doing you a favor. But it isn’t. As long as you are in the right financial shape to receive a credit card, your past credit history should not impact the lender’s ability to work with you. That is why it is so important to be proactive and search around. By taking your interests to several lenders, rather than accepting the first deal you find, you are much more likely to get the best deal for you.
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ABOUT THE AUTHOR
Devora Witts is a certified loan consultant who helps people get approved for Loans for People with Bad Credit and Bad Credit Mortgage Loans. To get aid with your financial situation you can visit her at http://www.badcreditloanservices.com