Max Anderson
Bad Credit Cards: 7 Things You Need To Know
When you're looking for bad credit credit cards, weeding
the bad credit cards from the good ones can be like
searching for a needle in a haystack. With so many
predatory lenders getting into the bad credit card arena,
it's essential that you follow these seven rules if you
want to avoid getting taken by the bad credit cards out
there.
1. Never Pay Up Front
The first thing you need to understand when dealing with
bad credit credit cards, and bad credit cards in general,
is that no legitimate credit card offer is going to require
you to pay money up front. If a credit card company won't
process your application without you sending in an up-front
fee, it's a scam. There's no ifs, ands, or buts about it.
2. You May Have to Pay For it
Now, just because you're not going to pay up front for bad
credit credit cards doesn't mean you aren't going to pay at
all. When credit card companies require an annual fee, it
doesn't mean that it's not a legitimate credit card offer.
The difference between the bad credit cards and the good
credit cards is that the good credit cards will charge your
annual fee to the credit card they are issuing -- they
won't ask for you to pay the fee up front.
3. Interest Is Going To Hurt -- But It Doesn't Have To Kill
You
When dealing with bad credit credit cards, you are going to
have to pay a higher interest rate than people with good
credit. That doesn't, however, mean that you should pay
through the nose.
If you're being charged more than 20 percent interest,
you're dealing with bad credit cards. Even with bad credit,
you should be able to keep your interest rate below 20
percent.
4. You Might Need to Secure It
If you're credit isn't good enough to enough to qualify you
for an unsecured credit card, you might have to settle for
a secured one. This means that you may have to give a
security deposit that will be used to ensure your credit
limit.
If you deposit $200, your credit limit should be $200.
However, some of the bad credit cards will ask you to
deposit more than the credit line they are issuing you.
If this is the case, go elsewhere for your credit card
needs.
5. Secured vs. Prepaid
Now that we've covered secured credit cards, it's important
that you understand that secured credit cards are very
different from prepaid credit cards.
While prepaid credit cards do serve a purpose, they are bad
credit cards if you're trying to rebuild your credit, since
they don't report anything to the credit bureuas.
Make sure when applying for a secured credit card that the
credit card company will report your payments to the credit
reporting agencies.
6. Adding it Up
When applying for bad credit credit cards, make sure the
fees and credit limit offered make sense in relation to one
another.
There are some very bad credit cards on the market that
charge exhorbinant fees and issue very small lines of
credit.
For example, they company may charge a $79 annual fee and a
$85 processing fee, but only issue you a $200 line of
credit. This means that you only have a credit line of $36
available when the card arrives, and a debt of more than
$160.
7. Watch Those Grace Periods
When dealing with bad credit credit cards, you absolutely
must watch those grace periods and pay close attention to
when your payment is due.
Some bad credit cards will have almost no grace period at
all, and by the time you receive the bill, the payment is
already due -- leaving you no time to send your payment in.
This is bad for you and good for the credit card company.
Why?
Because these bad credit cards can then tack on late fees
and can increase your interest rate due to the "late"
payment that you had no control over.
So, follow these seven fundamentals to help avoiding
getting stuck with bad credit cards -- regardless of your
credit rating.
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For more tips on getting the best bad credit credit cards,
saving money and avoiding getting taken, check out
CreditCardTipsEtc.com, a website that specializes in
providing credit card tips, advice and resources.
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