Credit Card Offers For Bad Credit

Secured Credit From Loans And Credit Cards For Borrowers With A Low Credit ...

Borrowers who are seeking some form of secured credit have typically turned to loans or secured credit cards when a low credit score may be preventing them from more traditional lines of credit that can be used for everyday purchases, improving their credit score, or as a way to consolidate debt. Many consumers often inquire about secured loans as a way to accomplish bad credit debt consolidation, which they hope will bring them more affordability in their debt obligations, but there are those who also seek out secured credit cards as a way to begin the process of repairing a bad credit score when this particular factor in their financial life may be causing problems in other areas.

However, there are aspects of secured lines of credit that must be explored and, before a consumer begins seeking out either a secured loan or credit card, it’s often advised that these individuals look at the rates and benefits that are available not only in general but for their particular situation. Currently, credit cards that are available to bad credit borrowers, like secured cards, are averaging rates of around 24%, but there are some secured credit cards that have advertised rates that are much lower, and it will depend on a consumer’s situation and the severity of their bad credit score as to what rate they may receive. However, when dealing specifically with secured lines of credit, some consumers may find that there are variable interest rates associated with these credit cards and loans, so getting a low introductory rate may not be as great of a deal as one would think.

There are advertisers who are either offering the secured credit cards or secured loans and may advertise lower, fixed rates for consumers but again, a consumer’s credit score will dictate what rate they get and, obviously, each lender will differ in what may be required of a particular borrower or cardholder.  Some secured loans, for example, may offer low rates of around 12% but others could fall into the 20% range, so comparing reputable offers will take some time on the part of a borrower. However, there are also those who have advertised adjustable rates, so this needs to be taken into account as to how it will affect a consumer’s use of either their secured loan or credit card.

In the area of secured loans, as an example, an origination fee may also be charged by some lenders, but this can be either affordable or excessive, so this is another area of research that consumers are prompted to conduct. However, consumers need to understand that no matter if they are looking for a secured loan that offers debt consolidation or if they want a secured credit card in the hopes of repairing their low credit score, some form of collateral must be offered and this is where many advisers feel that consumers do not fully understand the responsibility.

The Best Credit Cards for Bad Credit

It’s an unfortunate fact that credit cards for bad credit tend to have terrible terms, and that issuers often market their worst financial products to those who can least afford them. Shiny advertisements scream out cards’ benefits: “No credit check! Reports to major bureau! No introductory APR!” These claims, though, sometimes mask interest rate hikes, unexpected fees and even outright scams. Everyone, and especially those with bad credit, should be on their guard when choosing a credit card.

If you have bad credit, you probably know that you won’t be getting killer rewards deals. In fact, you’ll be seeing interest rates that are, on average, about twice the rate of low APR credit cards. You’re also more likely to pay annual fees. These are standard for bad credit cards.

Carefully weigh the tradeoff between a card that has an annual fee with a lower APR and a card with no fee but a higher interest rate. Most consumers prefer no fee cards above all else, even though they may end up paying more in interest over time. Make a realistic decision based on your likelihood of carrying a balance.

Your credit card should not have an interest rate above 30%. The Credit CARD Act of 2009 stipulates that the total fees you pay in the first year cannot exceed 25% of your credit limit, so if you have a $300 credit line, make sure you aren’t being charged more than $75 in fees. Also make sure that you won’t be hit with new fees once the law’s protections expire, and keep an eye out for sneaky processing fees that will be levied before you receive the card.

Some of the best cards offer lower interest rates than usual, or waive penalty interest rates. Such cards are often issued by federal credit unions, which are not-for-profit institutions that cannot legally charge more than 18% interest.

Some cards make fraudulent claims , and a few should be avoided at all costs. These cards in particular promote themselves as easily accessible, requiring no credit check, but can actually be detrimental to your finances.

Net First Platinum & Horizon Gold: These two cards, issued by Horizon Card Services, are among the worst we’ve seen. They aren’t actually lines of credit, and only offer credit toward the Horizon Outlet store. Customers say that it’s extremely difficult to get rid of the cards once they realize what they’ve signed up for. Despite the bold lines on the NetFirstPlatinum site, the cards are not credit cards, the $500 credit limit is meaningless, and according to the disclosures buried deep on the website, they will not help to rebuild your credit score.