Types of Bad Credit Cards

May 10, 2011 by  
Filed under Finance & Loans

Even though your credit score might have taken a plunge recently, you can be sure that there are a slew of instant approval credit cards that might be offered to you and are designed specifically for people who have bad credit.

While your usual credit card company might have turned down your application for an extended credit line, the truth is that you have nothing to worry about in finding the funds that you need, provided you make changes in the way you spend money from now on.

Since there are two types of bad credit credit cards offered, it becomes important to compare which type is right for your situation. Here are three things to consider before you make a choice:

#1: Secured Credit Cards

This type of credit card requires a deposit from the person who wants the card, and which will be drawn as soon as he or she defaults. This kind of card is ideal for people who have poor credit or no credit history, as there isn’t any risk involved in issuing the user with this type of card. What you need to be careful about is to ask the bank or lender if there is a monthly or start-up fee for using such a card.

#2: Unsecured Credit Cards

There are several lenders and banks who will offer you this type of card and even up to a car loan for bad credit. What you need to be watchful of is the annual percentage rate or any monthly fees that might be charged with this type of card. If there are additional benefits that are offered with the card you are applying for, then all you have to do is watch how much you spend, and pay the minimum amount every month before the due date.

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