Unsecured Credit Cards for Those with Bad Credit

When individuals fail to pay their credit card bills, this directly affects their credit scores. And qualifying for another credit card would be like trying to go through the eye of a needle. But there is another way – unsecured credit cards. Unsecured credit cards are for those who either have no credit or those with bad credit problems. A security deposit is not a requirement as it is with a secured credit card. The advantage to having this is that despite the poor credit score one is able to obtain a card, but the disadvantage to this is it involves higher interest rates. The main purpose of an unsecured credit card for bad credit is to be able to restore the credit score once one is able to settle credit card debt.

But that’s not all it takes to raise your credit score. To quickly improve your credit is to show creditors that in spite of having a less than average credit you don’t need the new credit. In other words, you need to keep your balance way below what’s expected. For example, if you have a $500 limit, your balance should be below $100. By showing self-control, your credit score may rise up to 35%.

Unsecured credit cards have high interest rates and annual fees to dissuade a user from carrying a balance. It is important for bills to be fully paid each month. It usually takes about a year of disciplined-use of the card to be able to acquire a credit card with better terms.

When choosing to get an unsecured credit card, be sure to study the fine print; some of these have high fees. There are also times when offers come through mail. These may seem to be ‘easy to get credit cards’, but don’t be fooled. There will be fees attached to these in order for the company to recover the cost of sending out the mail that may amount to more than $200. Also, late payments will come with high fees and interest rates.

The best way for those with bad credit to obtain an unsecured credit and also in order to avoid any problems with fees and interests is through a known bank. The idea is to be able to revive the credit score and not make it even worse; unreasonable fees will not help it. Although getting an unsecured credit card after bankruptcy would require collateral because of the credit card history.

Source: FinancialPlanningTips.net