When in need of a credit card but with bad credit, many people are advised to apply for a secured credit card.
But did you know that there are unsecured credit cards offered for those with bad credit? Unlike a secured card, unsecured credit cards do not require a security deposit.
In this article, let’s discuss the steps you should do if you want to get an unsecured bad credit credit card:
Check your credit report.
In some cases, your credit score can drop even lower if your credit report contains errors, outdated information, or unauthorized charges. Hence, it’s always a good idea to check your report first even if you are applying for a bad credit credit card.
Take time to compare.
If you do your research, you will find unsecured credit cards that are especially offered for individuals with bad credit. Spend time comparing your options. Needless to say, the only way you can be certain that you’ve found a good deal is by doing comparison. Use credit card comparison websites to make your search easier. Read the reviews and check out the ratings as well. Carefully analyze the interest rates, fees, terms and conditions.
Read the fine print.
Understand the policy of the credit card issuer. Different issuers may have varying terms and conditions. Obviously, you are regarded as a high risk customer because of your credit history. To make up for that risk, the issuer may impose higher interest rates, fees, and restrictions on the use of your account. You could be provided with a lower limit as well. Before signing up your credit card application or making a decision, you should read each and every statement in the Agreement.
Be ready for the consequences.
An unsecured credit card for bad credit may require more fees and higher interest rate. For example, you may be expected to pay a set-up fee, annual fee, and monthly maintenance charges, just to name a few. See to it that these charges are reasonable and that you can afford them to keep your credit card active.
Use your bad credit credit card to improve your credit score.
Once approved, use your unsecured bad credit credit card regularly as this is the fastest way to rebuild bad credit. You do not need to charge large amounts of purchases on your bad credit credit card to raise your score. What’s more important is how you pay off those charges.
Request for an upgrade.
After six months, check your credit report to see if you made a significant progress in your credit score. If you have, call up your unsecured bad credit credit card issuer and request if you can get a lower interest rate. Most issuers will grant an upgrade after 12 months of consistent performance but it is worth the try to make the request after 6 months or so. The sooner you can switch a regular credit card account, the more you can save money on credit card rates and fees.