- Personal Finance
How to get a Credit Card with Bad Credit
Credit Cards and Bad Credit
A secured credit card is the best option if you have a bad credit history. This card is usually extended to clients who have no credit limit at all or who have an overall bad credit rating. The way the credit card for bad credit works is very straightforward and you will find that either your card has an annual fee or an annual fee has not been included. One of the key requirements to get a bad credit credit card is that you make a cash deposit on your card which then acts as your credit limit.
This is the limit that will be provided to you by a financial institution upon application for a bad credit credit card. Irrespective of the type of credit card, all credit cards come with a set limit. When you build up your credit and can show a favorable credit history, your credit limit will go up. When this happens, you are able to build a good relationship with your credit card provider, which increases your credit rating.
Secured Credit Card
As mentioned before, this type of credit card requires an advance cash deposit be made before you are able to access the services. The advantage of this type of card is that it will help you not overspend beyond your limit. As you make cash deposits, it is advised that once you begin using your limit that you make the repayments as required as well as ensure the transactions are below the limit. If your card comes with any fees, you should also ensure it has been paid.
Credit Card Fees
Credit card fees are common for most of the credit cards. When you take a bad credit credit card, you should enquire from your provider whether yours comes with an annual fee or any other fee. Most credit cards have annual fees that are usually loaded on the card at the end or beginning of the year. Some providers will charge the fee upfront and some may charge you by month depending on the agreement. If you default on your payment, there is a penalty fee that is charged.
Your credit rating reflects your credit behavior. It is determined by your credit history as this usually has your repayment, credit card usage as well as your credit card limits. A credit bureau is also able to provide or access your credit rating. It is good to start working on your credit rating as this usually has an impact on major financial decisions. Be sure to establish a good relationship with your credit card provider to redeem your credit score.