Credit Cards For Bad Credit

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Finding credit cards for bad credit is not a hard task unless your looking for one with a low annual interest rate with no fees. There are two types of credit cards for bad credit available, they both have their pros and cons.


The first type of credit card for bad credit is a unsecured card. These cards come with unsecured lines of credit, but they also come with high annual fees and low credit limits ($250 credit limit or above depending on your credit). Three financial institutions that offer these credit cards for bad credit are First Premier Bank, Applied Bank and Orchard Bank.

The second type of credit card for bad credit is a secured card. These cards come with lines of credit secured by a deposit equal to your credit line. The more you deposit the higher your credit line will be. This deposit is also refundable after one year, turning your secured credit card into a unsecured one. These cards, since they are secured, come with lower annual fees. Two companies that offer these secured cards are Bank Of America and Orchard Bank.

If you are approved for a credit card for bad credit, whether it is secured or unsecured, you can obtain annual credit line increases from your credit card company and help raise your credit rating by making on time monthly payments.

Your credit history is important to a lot of people such as mortgage lenders, banks, utility companies, prospective employers, and more. So it's especially important that you make your monthly payments on time with your credit card company so your credit score will improve which can lead to better credit card offers with lower APR's and higher credit limits. You can set up automatic payments from your bank account to help you pay on time, but be sure you have enough money in your account to avoid overdraft fees. Also remember that many scoring models compare the amount of debt you have and your credit limits. If the amount you owe is close to your credit limit, it is likely to have a negative effect on your score.

If you get, or are over your head in credit card debt, do your homework. Review your income and expenses, estimate how much money you might have available to pay down your credit card debt, and consider cutting back on, or eliminating, optional expenses.