Credit Cards for Bad
Credit - Knowing The Choices
When folks have
Credit, how can they
tell which Credit Cards
to select when there are so many possibilities?
This article will break down a few types
of cards to offer a helpful understanding
of the benefits of each:
Cashback - With a Cashback
card, customers are rewarded with a reimbursement equal to
a fraction of their transactions. For example,
if a customer has been approved for a Cashback
offer that awards five percent cashback
on groceries, gas, and pharmacy
purchases, as purchases increase and rewards accumulate, they can converted to cash. If you
use a hundred fifty dollars in gasoline, food,
and drugstore items every week, at
the conclusion of a year, almost $400
in cash back rewards would be ready to cash out.
Rewards Points - In lieu
of providing cash rewards, some issuers
give redeemable rewards. Customers earn
points when purchases are made. Every time the card is used, the points
add up. Once a specified number of points have accumulated they can be cashed in for perks like
free hotel stays, gifts, subscriptions, and more.
It is important to know whether or not the Credit Cards
for Bad Credit that you want will offer
a points program.
Fuel Rewards - Companies
can be considerate of the price
of fuel and want to offer an incentive to
their customers for using their credit card by offering them a free
gas card. As transactions are completed, points are accumulated and summarized. After you have earned enough points you are eligible for a
prepaid gasoline card. The cool thing is, with some cards fuel points can be earned
while buying gas.
Points Toward Free Rental Car Upgrades, Hotel Rooms, or Frequent Air Traveler Miles - When purchases are made with these cards, "customers receive "" points"" toward free travel including free frequent flyer miles." As the points add up, they can be cashed in for discounted or free airline tickets or travel accommodations. Frequent travelers really like these rewards.
0% Promotional Interest Rates - Finance charges are not applied on these cards for a specified amount of time.
The period where no finance charges are being applied generally spans six to twelve months.
Smart folks are advised to utilize promotions such as this
to shift their balance from their interest bearing Credit Cards
to one like this and create a personal budget that allows them to pay the whole thing off without having to pay any finance charges. Making timely payments is very important.
When the first payment becomes past due, typically
the interest free introductory rates adjust to a much higher
rate. Folks that are applying for
Credit Cards for Bad
Credit, and are offered an interest free period
should think about this option.
Secured Cards to Establish Credit - People with a secured card
must insert a specified amount of cash in a savings account.
This is what secures the account. After the deposit is made a credit card is
extended to the applicant with a credit max equal to
the opening balance of the interest bearing account that was created. As the card is used your available credit is recalculated, low rate
monthly payments are determined, and a bill
is is mailed or emailed if you choose paperless billing. If transactions are being approved, a relatively small monthly payment is expected. Secured Cards to Establish Credit
are awesome because they perform the same as
conventional credit cards allowing customers
to complete all kinds of transactions including booking travel accommodations such as hotels, rental cars, airline tickets, or cruises
that sometimes do not take standard bank account
cards. When applicants have bad credit approval is generally
guaranteed despite your credit profile. This can help in the rebuilding process because many
credit-rebuilding card companies report whether or not timely payments are made
to be added to your credit profile. This could be a terrific
practice to show creditworthiness by making scheduled
payments whether you have Bad
credit or not. Once you make
a certain number of payments in a row, most times the bank that gave you the card will allow you to make purchases over your current limit without
asking for additional collateral.
Prepaid Credit Cards - With
a Prepaid card, you get out of it exactly what you put in. Just like
a checking account, you put money in and this is
the credit limit. After the prepaid credit card
balance has been exhausted, a deposit into the prepaid account can be made and the new credit limit will be the amount of the new deposit. Prepaid cards
work well for parents to use to give an allowance to their teen or college student, transactions can be tracked and recorded if necessary, and they work well for individuals that are unable to
obtain a normal banking account.
Approval is generally guaranteed despite
your bureau profile and there is
no need for the prepaid company to send any inquiries to Experian, Equifax, and TransUnion.
With all of the diverse kinds
of Credit Cards
for Bad credit and
bonuses that they have, there is something for everyone. Look for
Credit Cards that allow for the most rewards. When you receive your card be sure to
try to keep your purchases at less than half of your credit limit and make more than the minimum payment every month. Excellent credit is an awesome
To make sure that you keep cultivating a great credit profile, obey these few instructions:
1. Always have a balance at a percentage of the
credit limit. Another way of saying it is, it is not smart to
"over spend". Most people with excellent credit make it a point to maintain
a bill that is no more than fifty percent
of the maximum spending limit on any
Credit Cards for Bad Credit.
2. Do not make late payments. Even if a small payment can be made, it is better to make that small payment on time then it is to try and pay more at a later date. When payments are made more than 30 days late, that information could be reported to the credit reporting companies. This is bad for the consumer's credit report. As a result, customers may also experience more points on the card's interest rate as a consequence of a single late payment. Therefore it is recommended that consumers make payments.
3. Repay the balance completely every time your finances will allow.
When purchases are made, make it your goal to
pay it all off at least one time per year. When you do this, go ahead and
make more purchases then pay it off once again after over the course of a few billing cycles, and keep this cycle going.
This sequence illustrates to the lenders
that you can be a great customer. Most lenders reward customers like this with
low rates, more of a limit, and a better credit profile.
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