Three Credit Cards For Individuals With Bad Credit
Posted September 29, 2010 – 2:17 am in: LoansDo you want a “Bad Credit” credit card? People with challenging credit histories often suffer unfairly from high mortgage, insurance, and car loan rates. On top of that, they have problems getting approved for credit cards. The whole situation can get extremely frustrating. Frequently, I get emails from consumers wondering what they can do to restore their credit. The first thing I say to them is to get a credit card designed for those who have bad credit. The next thing I tell them is written in bold: READ The small print.
There are merely a select few of credit cards for individuals with bad credit. Initially, many look identical. They all help build and repair your credit by reporting to the major credit bureaus on a monthly basis. They all offer the Visa or Mastercard you have to make many purchases. And they are all necessary evils that can save you thousands of dollars in mortgage and car finance rates in the future. However, you have to read the fine print before you apply for one of these credit cards, as they often charge high yearly fees, set-up fees, and in some cases monthly fees. Here, I will examine a few examples of charges current “bad credit” credit cards bury in the small print. Of the three major cards I’ll examine, only one stands out as consumer-friendly.
Credit Card #1: This credit card charges a very low interest rate for an credit card. However, your first fine print glimpse reveals that there’s a one time setup fee of $29. Not too bad. So far, since the next charge is a one time fee of $95. So far, we are up to $124 in expenses. That’s got to be it, right? No. Include another $48 for the annual fee and $6 per month in account maintenance fees. That brings the price of your new credit card to $244 the initial year, and $120 each additional year. This really is no small change, and a card such as this should be thought about only when you cannot be accepted for a better unsecured credit card for bad credit.
Credit Card #2: This credit card charges a very high interest rate for an unsecured credit card. This cannot be good. But the setup fee is only $29. Maybe this card is not so bad. There is that pesky monthly maintenance fee of $6.50 per month which brings the price of this credit card to $107. Maybe we’ve found a bargain. Not quite. The annual fee is a whopping $150. Yes, $150 every year. That not only brings the initial cost up to $257, but additionally, you will pay $228 a year just to maintain the credit card. There has to be a better offer.
Credit Card #3: This credit card is accessible as both a secured and unsecured credit card, in line with the issuer’s review of your credit report. The interest rate is average, even competitive. Now, the small print reveals that there is a one time setup fee. However, based on your credit, this fee is often as low as $ or up to $49. So far so good, especially when your credit is not that bad. But, there has to be an enormous annual fee. Not exactly. The annual fee for a secured credit card is just $35, and for an unsecured credit card, this fee is often as low as $39 or up to $79. So far, the cost of this card ranges from $35 to $128. Now it’s once again time for the monthly maintenance fee. This one has to be huge. Or not. Its $. Which means the most you can possibly be charged to get this credit card is $128, about 50 % of what competing cards are charging.
Obviously, there are substantial differences between “bad credit” credit cards. From the three offers we have reviewed, just one will not take you to the cleaners. In reality, “bad credit” credit card #3 provides great value. All positive changes to your credit report and credit score will translate into lower loan rates, lower credit card interest rates, lower insurance rates, and ultimately, 1000s of dollars in savings. The direction to rebuilding credit has its costs, but in the long run, reconstructing your credit with a “bad credit” credit card is the fastest and most cost-efficient method to correct the often regrettable circumstances that have damaged your credit to begin with.
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