Many of us don’t realize just how important a good credit score really is until we have made some financial mistakes that dramatically lowered the our overall score. When a credit score is bad, it is nearly impossible to be approved for any type of loan. One of the best ways to start repairing a poor credit rating is through the use of credit cards for bad credit. Credit cards are an excellent choice when you are trying to repair your bad credit score because you control the spending. You don’t have to worry about if you are going to be able to scrape together the funds for a monthly car payment. When times are tough and money short, you simply don’t use the credit card.
Don’t Expect Instant Results
When you are trying to raise a low credit score with credit cards for bad credit you need to be patient. Improving a low credit score takes time, a lot of time. If you are hoping to raise your credit score enough to be approved for a mortgage or other type of large loan, you should give yourself more yourself at least twelve months before you approach the bank for the loan. The higher your credit score, the better chance the loan will be approved.
Make Your Monthly Payments
When you are using credit cards for bad credit, it is extremely important that you don’t slip into the pattern that ruined your credit score in the first place. Credit cards have a minimum monthly payment, but you shouldn’t fool yourself into thinking that paying the minimum is enough to raise your credit score. When you are trying to improve your credit rating you should pay off the entire balance every single month. The best way to do this is to make sure you don’t use the card for any purchases you can’t afford right away. When you are making a purchase you can’t forget about the credit cards interest rate.
Types of Credit Cards
There are several types of credit cards for bad credit, the trick is trying to find one that best suits you. You do have to remember that each time you apply for a credit card, the company issuing the card is going to check your credit history. This means that you won’t be approved for a credit card with a large credit limit or one that has a low interest rate. credit cards for bad credit usually have large fees, low limits, and extremely high interest rates. The good news is that you won’t be stuck with the same credit card forever. Once your credit score improves, you will be approved for credit cards that charge no annual fees and that have more reasonable interest rates.
One of the best places to find credit cards for bad credit is department stores and gas stations. Since these cards (Shopping Credit Cards) are only good in one store or chain, they are usually easier to qualify for. Not only are these cards a great way to improve your credit rating, department card stores can actually save you money. It isn’t unusual for department stores to offer discounts to customers who use their cards when purchasing items. Some department stores have a reward system for their credit cards. Other department stores don’t charge interest if the balance is paid quickly.
Secure cards are also an excellent choice when you are looking for a credit card that can be used to improve your credit rating. A secure credit card is a little bit like a pre-paid credit card. Before you can use a secure credit card, you have to give the credit card company a predetermined amount of money. The amount you send in is the maximum amount that you can charge to the card. Each month you are expected to make a payment. Usually, if you are good about making your monthly payment, the credit card company will increase your spending limit without asking you for additional funds.
Prepaid Credit Cards
There are lots of things to like about prepaid credit cards. One of the great things about prepaid credit cards is that they eliminate the need to carry a pocket full of cash. What prepaid credit cards don’t do is help you rebuild your credit. The companies that provide the pre-paid credit cards don’t have report to the credit bureaus that track individual’s credit score. Instead of getting a pre-paid credit card you should use credit cards for bad credit.
- Credit Cards for Bad Credit
- Shopping Credit Cards
- Prepaid Debit Cards
- Guaranteed Approval Cards
- Credit Reporting Cards