Credit Cards For People With Very Bad Credit
Millions of Americans struggle with bad credit problems. A person's credit history is becoming increasingly important. Gone are the days when a bank or credit company can loan money because they personally know the applicant. We are now global consumers and there has to be a global method of determing a person's credit worthiness.
If your credit scores are low and you are in need of credit for whatever reason, then you need to learn more about credit cards for people with very bad credit.
There are generally two types of credit cards; secured and unsecured. Unsecured credit cards are
generally offered to those with good credit scores. Since the lenders are taking a chance that the borrower will repay they want to see a good history of repaying their loans. These type credit cards will offer a good interest rate to the borrower. If you have very bad credit then you are likely going to need to apply for a secured credit card.
A secured credit card is an excellent way for people with very bad credit to re-establish their credit rating. Secured credit cards are like a debit card. The difference being that companies that issue the secured credit cards report your payment activity to the credit bureaus, therefore, if you make your payments on time then it will help improve your credit scores. Your credit limit is equal to the amount of money that you have on deposit with the credit card company.
Even though secured credit cards are very good credit cards for people with very bad credit and will allow them to improve their credit scores, they are not cards that you want to keep long term because they ususally have a high interest rate and a high annual fee.
As soon as you have improved your credit scores sufficiently to acquire an unsecured credit card then apply for the unsecured card and cancel your secured credit card.