Credit Cards for People With Bad Credit – How to Avoid Getting Ripped Off

Executive summary by  Charles J. Phelan

If you’ve had credit problems, then you’ve probably received offers for credit cards aimed at people with bad credit. Where it really gets interesting is the section that lists the fees associated with the card. Toward the bottom of the document, buried in the fine print, we see something called “Available Credit Limitations.” On your very first statement, you will be billed for the $150 annual fee, plus the $29 setup fee. This credit card offer, while legal, still counts as a total rip-off.

In the bogus category I’d also include cards where you are forced to pay an advance fee prior to receiving the “guaranteed” credit card, which of course never arrives. There are also “catalog cards,” where you supposedly build credit by purchasing items through a card tied to one particular company and their catalog of goods. So what constitutes a good credit card offer for someone who’s experienced serious credit problems and wants to take action toward rebuilding his or her credit? At the risk of annoying the big credit card marketing companies who target the “sub-prime” market (consumers with bad credit histories), my advice is to completely avoid any offer that comes to you unsolicited. Check out www.bankrate.com for current offers by legitimate credit card companies. What you want to look at very carefully are the annual fees, setup fees, and monthly fees.

It’s important to realize that you may not be able to obtain an unsecured credit card when you’re just starting to rebuild your credit. Instead of paying $257 to obtain $300 in credit, you’d be far better off placing $250 as a deposit toward a good SECURED credit card from a reputable major bank. Your $250 deposit will net you $250 worth of credit (less the $29 annual fee), and you’ll build positive credit history just as quickly as with the ridiculously expensive offer discussed above. After you’ve been granted unsecured credit again, and you’ve paid off any outstanding balance on the secured card, you can get your deposit back.

If you have the opportunity to join a credit union, you should consider checking out their offers for low-limit unsecured and secured credit cards. Credit unions frequently offer much better terms than regular commercial banks. Through credit unions, you can often find credit cards with no annual fees, lower interest rates, and more flexibility. Be sure, however, to confirm that the credit union reports account activity to the credit bureaus. Otherwise, your positive payment history on the new credit card won’t lift your credit score. And remember, no matter what card offer you’re considering, be sure to read that fine print!

Bad Credit Credit Cards – Choosing The Right Credit Card

Executive summary by : Carrie Reeder

If you have bad credit, your credit card options are limited. Aside from many credit card companies denying your application, individuals with bad credit usually receive very low credit limits and additional fees.

When applying for a credit card, choosing the right card is essential.

Take Advantage of Bad Credit Credit Cards

Before applying for a major credit card with a bank, carefully consider your credit rating. Credit card inquiries will decrease your credit score. Several companies issue unsecured and secured credit cards to people with bad credit. This is a great way to improve credit rating and re-establish a good credit history.

Criteria for Choosing a Bad Credit Credit Card

Although bad credit will stand in the way of obtaining low rates on a credit card, researching various companies and comparing offers is smart. Many credit card companies make claims of offering bad credit credit cards to help individuals improve their credit. Before applying for a bad credit credit card, read the fine print for information pertaining to user fees. In addition to opening a savings account, most secured bad credit credit cards have several upfront or startup fees. Unfortunately, extra fees on a bad credit credit card are unavoidable.

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