People often want to apply for a credit card with bad credit. There can be many reasons why people have this type of credit history. Being able to get a card can often help them to rebuild their scores.
These financial products are available in several types. There are some kinds that are available from regular banks. These tend to have low limits, medium to high interest rates and generally charge an annual fee. In some cases, people may be able to get the annual fee waived or lowered but not always. Over time, the customer may be able to negotiate a higher limit or possibly a lower interest rate if they have made payments as requested. These types of cards report to the credit reporting agencies and over time help a person to build or repair his or her score.
People who want to apply for a credit card with no credit may or may not be able to use this type. These folks plus others who have a negative score may want to try the types that require a security deposit. These types are similar to the other kinds but may be slightly easier to obtain. These require that the person place some money in an account in order to have this type of card. This type of card is different from the so-called “prepaid cards”. These are actual cards that have the payment histories for them reported to the agencies. The prepaid cards generally do not have any connection to the credit reporting agencies and have no impact on creating or rebuilding a score. These types of credit cards for bad credit allow people to purchase things, but do not help their scores.
As with most credit problems, it takes time to have things improve. The best thing that people can do is to pay the bill as requested. If they can, they should also make a payment that is above the minimum amount. This does two things. It get the bill paid faster, thus also paying a lesser amount in interest. It also gets reported to the reporting agency that the payments have been made as agreed upon.
People who succeed in raising their scores will find that they have more options later. Once the score is up, they can ask their card company to reduce the amount of interest or the annual fee. If this is not possible, they are now in a position to apply for other types of cards that cost less. At this point they will no longer be limited to having to apply for a credit card with bad credit.
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