Best Credit Cards for Bad Credit

If you have a bad credit card history, then chances are you will have a difficulty in obtaining a credit card. But, if you take care of your credit habit then you can work towards a better credit score. A good credit score will eventually help you to regain the confidence of lenders.

When one shops around for a credit card, they want to get the best value for their money. So, one looks for the service providers that charge the lowest interest rate, low fee or no fee and flexible payment terms. But, if you have a bad credit history, your options are limited. Those who have a FICO score lower than 600 have to pay more interest rates and fees to the bank than others. This is because banks perceive them as high risk customers. But, if your credit habit improve than these card companies report the same to the credit bureaus who might in time reevaluate your credit score. In the long run, you might be able to move into less expensive financial offerings.

Options at Your Disposal

Bad Credit Charge Card:         You must have come across the term‘bad credit charge card. A bad credit charge card usually has a high interest rate, high annual fee, etc. But it is the secured card and it is often used to improve one’s credit score. It gives the user a credit line equal to a certain deposited amount in the card holder’s bank account. These deposits are kept in a savings account that gives interest. If the user is regular with repayments then the bank might offer him normal rates and but he is unable to pay then the deposit is forfeited to the bank. The initial cost of such secure cards is high, but it can save you from being sinking into a bottomless debt pit.

Retail Store Credit Card: Often retail store credit cards are used to improve the FICO score by bad credit customers. But, more often than not, it can lead to overspending. If, you opt for this card, make sure you have the ability to repay every month.

What will work best for you?

One should understand that every person’s credit needs are different. It is best to research on the good credit card websites to find out the options available to them. You can check reputed sites like credit karma, credit.com for all financial information. Be aware of shady sites that promise to bring you out of debt without giving concrete information of their offerings.

Always try to form the habit of spending only what you can repay. Sinking yourself in credit debt by overspending can put into problematic situations.