These days, poor credit is a kind of problem that many people are confronted by. The advantage is, you can do something to enhance your credit history and have yourself out of bad credit.
In this post, let’s look at some of the credit cards that you can use to restore your credit quicker.
Secured Credit Cards.
A secured credit card is a popular type of credit card that needs the submission of security deposit. The amount of deposit ranges from $300 to $500, depending on the issuer. Usually the spending limit is equivalent to how much deposit however, many issuers present you with a slightly lower or higher borrowing limit compared to the required deposit. The issuer will make use of the deposit if ever the cardholder fails to repay the credit card balance on time, thus eliminating the potential risk of default.
Secured credit card issuers report payments to the major credit bureaus so they can be used for repairing bad credit. By using the secured credit card regularly and paying your balance on time, you can proof your capability to handle debt and credit. After 6 months, order a copy of your credit report to check your improvement.
Unsecured Credit Cards.
There is a new type of bad credit credit card in the market which does not require security deposits. However, unsecured credit cards for bad credit are expected to carry higher interest rates and finance charges. If you want to get a credit card but do not want to pay down payment, you can opt for unsecured bad credit card.
To make sure that you will get a good deal, take the time to compared unsecured bad credit cards in the market. You can easily do comparison by visiting credit card review websites. Remember to look for a credit card that will report your payments to the major credit bureaus – Experian, Equifax, TransUnion.
Prepaid Credit or Debit Cards.
Prepaid credit cards or debit cards have evolved since they were first introduced in the market. Today, you can find issuers of prepaid cards that report to the major credit bureaus to help you rebuild bad credit. Although prepaid debit cards do not provide credit lines, they can be used in all shops and establishments that accept credit card payments.
Prepaid credit cards can be very convenient but consumers must choose a card with reasonable fees. Prepaid cards do not carry interest rates but you may be charged with a fee for each transaction you make. Therefore, planning your purchases ahead of time can save you a significant amount of money on transaction charges. Other prepaid credit card fees that you should be aware of are set-up fee, overdraft fee, monthly fee, annual fee, etc.
Anyone can easily obtain a prepaid debit card regardless of credit history or credit score. To start using the card, the account holder must first submit a deposit. Purchases and bills are instantly paid using the existing fund in the account. When the balance runs out, the prepaid cardholder must make a new deposit or reload the account in order to use the card for new transactions.