In this article, I will expose five mistakes people make with bad credit cards. Unfortunately many consumers with poor credit unknowingly hurt their credit score and waste excessive money on unnecessary fees. Bad credit is a lucrative industry and corporations know consumers are motivated by two major instincts. Fear of not being able to get credit and greed to obtain something for nothing.

Unfortunately consumers with problem credit have fewer choices when it comes to credit cards. Credit card companies assess higher fees and penalties for people with damaged credit so it’s important to make your decisions carefully. If you have poor credit and you’re in the market for a prepaid card or secured credit card, knowing about the following list of mistakes will help you avoid paying unnecessary fees or ruing your FICO score.

1) Non-bank Catalogue Cards

If you receive a pre-approved “gold’ or “platinum” card with a high limit and no credit check required, beware! These cards typically require you to purchase items only from the stores catalogue and scam you into paying merchandise that is overpriced by as much as 50% or more. Also these companies seldom report to the credit agencies.

2) 900 Number Telephone Scams

Beware of these type of advertisements asking you to call a 900 number for a guaranteed large credit line or for “instant approval”. These credit scams are operated by companies who lease phone company lines and profit by charging you higher than normal call costs. Most of the credit cards they offer gouge you with high application and processing fees. Some scams have you call a 900 number to get a secured card but all you really get is an application and a hefty phone bill.

3) Credit Card Insurance

This is just another way for the bank to profit from your account. This type of insurance usually isn’t necessary and extremely overpriced. If you feel you need this kind of insurance, you’re better getting it from an independent insurance agent.

4) Cash Advances

Cash advances amount to nothing more than a high interest loan. Banks can charge you a hefty advance fee and you are charged high interest immediately when you take out the loan. Unscrupulous banks will seek to eliminate any interest free period upfront and for as long as you maintain an unpaid balance. A cash advance check functions just like a credit card advance. If possible, avoid using your credit card for cash advances.

5) “Waive your minimum monthly payment”

is a popular offer credit card companies like to use, especially around major shopping times during the year. Though it may seem that the bank is trying to give you a break from your financial obligations, their main goal is to have you accrue more interest. If you fall for this bad credit card trick, you will end up owing more debt to the bank. Never miss a monthly payment if possible. Your goal should be to get out of debt as soon as possible.

Armed with the right knowledge, you can avoid being another victim of a bad credit card scam. With a little searching, you can find some good secured credit cards designed for people with bad credit. Get one and make your payments on time. This is one of the best ways to help you rebuild great credit.

Bobby Tan is a debt management consultant helping people resolve their bad credit issues. Find Bobby’s reviews of the hottest bad credit cards [http://www.badcreditcardtips.com] for bad credit at Bad Credit Card Tips web blog.

Get Bobby’s free 33 Days To Near Perfect Credit course. Click – [http://www.badcreditcardtips.com].

Author: Bobby Tan
Article Source: EzineArticles.com
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A strict credit check is to be done on all credit card applications to prevent a bad credit card. Financial concerns issuing credit cards have a credit verification agency to perform the credit check to ensure that credit card for people with bad credit is low. In the business strategy of any lending portfolio, a strategic decision has to be taken to maintain the credit worthiness of customer’s portfolio. Random issue of bad credit card will affect the receivables management scenario and will result in the holders of credit card with bad credit.

The concept of subprime lending refers to the decision of making advances to the riskiest category of people. Facts reveal that on appraisal of segment of bad credit cards issued to credit card for people with bad credit, there exist symptoms of failure to pay up their debts, missed payments, even minimum payments not made monthly and some turned to be bankrupt. There also exists a customer base that have the knack of making intentional default in making payments, in spite of being monetary well positioned.

Studies reveal that major financial concerns have kept certain provisions in mind before the issue of a bad credit card. They have reservations issuing cards to people with a poor credit record. Cards are not issued to the people residing at troubled areas of a city. The option of issuing cards to customers who have financial deposits at your concern is open. Else, a prepaid credit card can be the only possible solution, if issued.

In the United Kingdom, the best-prepaid credit card is accepted at leading retail stores. A prepaid master card is a common solution for handling customers with these credit norms. Since, defaults can occur from credit card holders who are in the borderline segment of the credit norms, prepaid credit card uk is issued to the customers by the banks who are reserved on the issue of bad debts. Customers even have a query on the best-prepaid credit card available in the market.

Having a poor credit rating can seriously limit your choices of credit cards. Most credit card companies are likely to turn down your applications, making things tough for you at a time when you most need a credit card. Fortunately though, that’s not the end of it as you have another option of bad credit cards. Naturally, this is a temporary solution until you can get back on your feet. Bad credit cards can also be used to help you improve your credit score, as long as you pay your credit card bills on time, that is. The only drawback to this would obviously be the higher than usual APR interests.

Nevertheless, if you are willing to provide collateral to the credit card company, you may qualify for a secured bad credit card with a lower APR. This way, you can still earn interests on your collateral, and simultaneously enjoy good rates. The downside is, you may be charged other fees such as annual fees or start up fees.

Before you apply for a bad credit card, it is prudent to do your homework first. As bad credit cards are usually offered to those with poor credit ratings, the APR would unlikely be low. Thus, comparing the various offers of bad credit cards out there would be a wise move.

One of the primary factors of consideration includes the upfront fees that credit card companies would charge you. In order to make a wise evaluation, it’s best that you have a plan to pay off your debt before your interests snowball. Other factors that you can use to help you make a better decision would be to analyze the reward programs that your bad credit card can offer. If you are entitled for retail discounts at specific retail stores when you charge to your bad credit card, this would be even more enticing.

With all these factors to consider, it is clear that you should look around before you apply for a bad credit card. Compare and contrast the various fees and rates of the candidate companies. Only after careful consideration should you take the next move and submit your application.

Adam Goldman recommends Find Credit Cards for finding the best bad credit card.

Author: Adam Goldman
Article Source: EzineArticles.com
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If you’re suffering from bad credit, you probably won’t have as many credit card choices as someone with good credit. But that doesn’t mean you shouldn’t be prudent and examine your options carefully before selecting a card designed for bad credit. Not all bad credit cards are the same! The terms and interest charges can vary greatly so be sure you do your homework before applying. It can literally save you hundreds of dollars each year.

Among the credit cards available for people with poor credit, a secured credit card is one of the best options. In order to qualify for a secured credit card, all you need to do is deposit money in a blocked bank account to guarantee the line of credit. Your credit limit is equal to the amount you deposit.

As you comparison shop for a card, keep in mind that if you make it a habit to pay off your balance in full each month, you’ll benefit more from selecting one with no annual fee and a longer grace period. If you tend to carry a monthly balance, you’re better selecting a card with the lowest annual percentage rate.

In order to evaluate the features of each secured credit card, you’ll need to see their disclosure of terms and conditions form. If you’re doing this online, click forward until you find it and review it carefully. Carefully compare the disclosure of each card and study the following:

1) Interest Rates

This is the amount of interest you will pay each year. With a history of poor credit, your yearly interest rate can jump as high as 32 percent, although each state can set a legal maximum. Banks can choose to calculate the balance over a one or two month cycle and can choose to include or exclude your current purchases from the balance. There are three primary ways to calculate the balance:

A) Adjusted Balance

The bank takes the balance you owe less any payments and then applies the finance charge. Current purchases are not added to the balance until next month. This method results in the least amount of charges.

B) Previous Balance

The bank calculates the finance charge on the balance at the beginning of the month without including any payments.

C) Average Daily Balance

The bank adds the total of each days balance during the billing cycle and divides by the total number of days in the cycle. Any payments made during the cycle are subtracted to find the daily amount you owe. Depending on the plan, new charges may not be included. All credit cards must disclose their method of finance charge and the annual percentage rate.

2) Transaction Fee’s

Some banks charge you for every credit card transaction you incur. Banks use this strategy to increase profits since half of their cardholders avoid service charges by paying off their monthly balance. If you use your secured credit card frequently during the month, you’re better off selecting a card with low or no transaction fees.

3) Beware of Low Introductory Rates

Sometimes a bank will advertise a bad credit card with a low “introductory” or what’s known as a “teaser rate”. Study the disclosure carefully because you may be surprised to find out the rate will skyrocket after a few months. Plus if you have bad credit, your new secured card may arrive with a much higher interest rate than advertised.

4) Grace Period

This is the interest-free period from the purchase date to the payment due date and applies only to accounts that do not carry a balance. If you have a habit of paying off your monthly balances, be sure you have a grace period, otherwise you’ll be paying extra interest.

5) Credit Limits

Banks will set your card limit based heavily on your credit rating. This limit includes all purchases, cash advances, balance transfers, fees, and finance charges. If you exceed the credit limit, expect to pay dearly in “over the limit fees”, and possibly higher interest rates. If you possess a bad credit card, expect to see astronomical interest rates if you exceed your limit. Be sure to monitor your credit card balance and never max out your bad credit credit card. This will only hurt your credit score.

It is the goal of this article to provide valuable insight into helping you select the best secured credit card for your financial needs. Even though your choices among bad credit cards may be limited, that doesn’t mean you can’t shop wisely for your next credit card.

Bobby Tan is a debt management consultant helping people resolve their bad credit issues. Find Bobby’s reviews of the hottest bad credit cards for bad credit at Bad Credit Card Tips web blog.

Get Bobby’s free 33 Days To Near Perfect Credit course. Click – http://www.badcreditcardtips.com.

Author: Bobby Tan
Article Source: EzineArticles.com
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Unsecured techniques of the debt consolidation are all among some most accessible debt consolidation choices out there as they don’t want you to secure debt against something.

As this is in distinction to the secured loans like mortgages that want you to place something as collateral or else security. But, unsecured loans have main qualification in form of good credit rating.

You need to have healthy credit rank prior to you can consider getting credit card with upright interest rate and if credit score is bad than you can’t get good credit card any longer, there is fix offered for your case. The solution also comes, as satirical as it may sound, as bad credit card.

Don’t take term in a wrong way. The bad credit is not very bad as such or harmful to the credit rank. In actual fact, they can be the opposite if used properly. The bad credit cards are called in that way as they are specially targeted for the people who are having bad credit accounts or bad credit scoring. As you can expect, they don’t need much besides the request form.

You can simply acquire bad credit card & lots of banks as well as financial institutions present them. Drawback with the bad credit cards is they have higher APR than usual credit cards have. It means you need to make punctual and habitual payments for credit cards. However besides saving from interest, there is one more important cause to make punctual payments, since you will observe later here.

As they have some requirements, the bad credit cards are easiest (perhaps an only) obtainable choice for you. Getting one can hold key to good credit score.

Get bad credit card for yourself and do light spending on that. Pay utility bills, purchase inexpensive outfit, do something to use up little of credit extensive to you. When the bills arrive, pay them as fast as possible; and do not allow the deadline goes down devoid of paying your dues. Repeat this procedure each month. What it will so is establishing you as debtor who is paying promptly. The credit card company can notice pattern and, soon, will some other creditors.

Using up little of credit line, you will ensure that costs are easily payable at end of each month & that you don’t get hurt by higher average APR. By using this method would not get better your credit rank overnight and this is for certain. You will not get any obvious effects for six months and it can also take a year for paying pattern to look after credit scores back to shape.

If loan or debt linked requirements are not instant or urgent, taking this particular course of act is well the effort for the benefits on the credit rank. This same credit score can be the key in getting the better terms on next credit card or else, indeed, about any other technique of the debt consolidation obtainable.

Start repairing your credit today with the best secured credit cards at FINDsecuredcards.com, where you can also find more of Tom’s work.

Author: Tom Tessin
Article Source: EzineArticles.com
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A credit card that can be gotten with a poor credit rating is known as a bad credit card. These cards give those with bad credit a chance to improve upon the credit rating they have. For those people the cards act as a rescue like this. Those that were unable to control past spending urges will find these bad credit cards provide needed training.

Secured credit cards are what these bad credit card cards are called. The person is required to open an account that maintains a cash balance with the supplier of the card in order to obtain one. What is the reason for this? Credit card suppliers are in business and they find it hard to trust someone that has not fulfilled payment obligations in the past. Profits are what business is all about and profits are put at risk by this. The balance on the account will normally earn interest from the bank or company providing the credit card. This should be checked with the company providing the card. The cash balance in the account will be the deciding factor of the credit limit that is placed on the credit card for bad credit and it is normally fifty to a hundred percent of the balance of cash. Debit cards are another name these bad credit cards are known by and this gives credit to the fact that they are more a debt giving item than a credit giving item.

The market has numerous bad credit cards available. There are four things in particular that need to be taken into consider when looking for a credit card for bad credit that is suitable for you. The amount of the minimum balance that the bank requires you to keep, how much credit (what percent of the balance will be available for spending on the secured card), any fees involved in the obtainment of the card and how much interest will be earned from the account balance. No fees or other charges will be associated with the perfect credit card for bad credit and the smallest amount possible or a zero minimum would be required to be maintained. The credit limit will also be anywhere from ninety to a hundred percent of the balance. A decent rate of interest will also be offered on the ideal credit card for bad credit.

The concept of bad credit cards is good for those that have a poor credit rating by allowing them relief by allowing them to partake in the benefit of credit cards to improve credit standings.

Nick Makaryk is an Internet Publisher, Copywriter, and Founder of Best Credit Cards A Free consumer credit card comparison site helps consumers find the Best Credit Card while avoiding high interest rates, charges, and fees.

Author: Nick Makaryk
Article Source: EzineArticles.com
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These days, credit cards have become a necessity as it provides people with spending power even if they do not really have all the money they need. Sadly a lot of people do spend to much that they turn out indebted, unable to pay for their bills and eventually unable to get credit cards anymore. People can indeed recover and repay all their debts but once that is done, getting credit cards to start their debt-free life would become a near-impossible feat. Thankfully, such people still have hope in the form of bad-credit cards.

Bad-credit cards are charge cards that people with bad credit histories can apply so that they can get the same benefits as regular card holders – be able too rent cars, book hotels, shop online – and most of all, rebuild their credit ratings so that they can get normal credit cards. The downside with bad-credit cards however, is that their interests rates could be higher, they might have higher joining and annual fees, or they might require collateral. But such are prices that people with bad credit are willing to pay because they do recognize the importance of credit cards in today’s society.

There are many different kinds of bad-credit cards but they can mainly be categorized as prepaid cards, secured cards and unsecured cards.

Prepaid Bad-Credit Cards – these cards are actually just debit cards specifically catered to people with bad credit. To get one, you only need to open a bank account and deposit at least the minimum required money. This amount would serve as your “credit limit”. Each time you purchase with your card, money is deducted from your account and if your money runs out, you will not be able to use the card unless you deposit funds again.

However, this is not at all a credit card because you are not really borrowing money, and thus it will not really improve your credit rating. Nevertheless it provides people with the conveniences of credit cards even if they are not able to apply for a real one due to their bad credit.

Secured Bad-Credit Cards – these are as good as credit cards, however to apply for one, you would need to open a savings account, the money deposited in which would be secured as a collateral by the issuing bank. The credit limit is determined by the amount deposited, or sometimes a little more than that to allow the cardholder some allowance. If the cardholder fails to pay, the bank may take hold of the money in the savings account.

Like other bad-credit cards, the interest rates and other fees are bound to be higher than regular credit cards. Also, some banks may not report such accounts to credit bureaus so it is important to make sure that the bank does submit such reports if the purpose is to improve the cardholder’s credit rating.

Unsecured Bad-Credit Cards – these work like regular credit cards however the fees and interest rates are considerably higher than normal cards. A cardholder may start with a low credit limit, around $250, which will increase little by little if the account is kept well. Such cards usually require large upfront fees, and interest rates can be as high as 25% while annual fees may go as high as $100. But it is usually considered worth it to pay such a price because they can really improve one’s credit ratings. Again, it is important to make sure that the issuing bank does report to credit bureaus to ensure that the credit rating does improve.

People with bad credit rating may still have a chance to get their credit cards. Thanks to bad-credit cards, people still can stand a chance.

Mario Churchill is a freelance author and has written over 200 articles on various subjects. If you have bad credit you can find a great bad credit card and some excellent credit repair ideas on his website.

Author: Mario PW Churchill
Article Source: EzineArticles.com

When you’re looking for bad credit credit cards, weeding the bad credit cards from the good ones can be like searching for a needle in a haystack. With so many predatory lenders getting into the bad credit card arena, it’s essential that you follow these seven rules if you want to avoid getting taken by the bad credit cards out there.

1. Never Pay Up Front

The first thing you need to understand when dealing with bad credit credit cards, and bad credit cards in general, is that no legitimate credit card offer is going to require you to pay money up front. If a credit card company won’t process your application without you sending in an up-front fee, it’s a scam. There’s no ifs, ands, or buts about it.

2. You May Have to Pay For it

Now, just because you’re not going to pay up front for bad credit credit cards doesn’t mean you aren’t going to pay at all. When credit card companies require an annual fee, it doesn’t mean that it’s not a legitimate credit card offer.

The difference between the bad credit cards and the good credit cards is that the good credit cards will charge your annual fee to the credit card they are issuing — they won’t ask for you to pay the fee up front.

3. Interest Is Going To Hurt — But It Doesn’t Have To Kill You

When dealing with bad credit credit cards, you are going to have to pay a higher interest rate than people with good credit. That doesn’t, however, mean that you should pay through the nose.

If you’re being charged more than 20 percent interest, you’re dealing with bad credit cards. Even with bad credit, you should be able to keep your interest rate below 20 percent.

4. You Might Need to Secure It

If you’re credit isn’t good enough to enough to qualify you for an unsecured credit card, you might have to settle for a secured one. This means that you may have to give a security deposit that will be used to ensure your credit limit.

If you deposit $200, your credit limit should be $200. However, some of the bad credit cards will ask you to deposit more than the credit line they are issuing you.

If this is the case, go elsewhere for your credit card needs.

5. Secured vs. Prepaid

Now that we’ve covered secured credit cards, it’s important that you understand that secured credit cards are very different from prepaid credit cards.

While prepaid credit cards do serve a purpose, they are bad credit cards if you’re trying to rebuild your credit, since they don’t report anything to the credit bureuas.

Make sure when applying for a secured credit card that the credit card company will report your payments to the credit reporting agencies.

6. Adding it Up

When applying for bad credit credit cards, make sure the fees and credit limit offered make sense in relation to one another.

There are some very bad credit cards on the market that charge exhorbinant fees and issue very small lines of credit.

For example, they company may charge a $79 annual fee and a $85 processing fee, but only issue you a $200 line of credit. This means that you only have a credit line of $36 available when the card arrives, and a debt of more than $160.

7. Watch Those Grace Periods

When dealing with bad credit credit cards, you absolutely must watch those grace periods and pay close attention to when your payment is due.

Some bad credit cards will have almost no grace period at all, and by the time you receive the bill, the payment is already due — leaving you no time to send your payment in.

This is bad for you and good for the credit card company.

Why?

Because these bad credit cards can then tack on late fees and can increase your interest rate due to the “late” payment that you had no control over.

So, follow these seven fundamentals to help avoiding getting stuck with bad credit cards — regardless of your credit rating.

For more tips on getting the best bad credit credit cards, saving money and avoiding getting taken, check out CreditCardTipsEtc.com, a website that specializes in providing credit card tips, advice and resources.

Author: Max Anderson
Article Source: EzineArticles.com