These Are the Top 4 Best Credit Cards for Bad Credit
Just because you have a bad credit score, it does not mean you still don't have costs to cover. And with each card you apply for and get rejected for, your credit score can be further damaged. This can be incredibly frustrating if you are working through your credit reports and trying to rebuild your credit.
So, the next time you apply for a credit card, you will want to make sure you apply for a good credit score for bad credit score holders.
When looking for good credit cards for bad credit scores, you have two main options when you next apply for a card:
- Applying for a Secured Credit Card
- Applying for an Unsecured Credit Card
What is a Secured Credit Card?
A Secured Credit Card will require you to pay a security deposit to cover the amount of credit you are asking for.
What are the Benefits of a Secured Credit Card?
A secured credit will be your best bet for beginning to work towards improving your credit score, particularly if you pick a card that reports to all three credit report bureaus. A lot of them as also optimized to help you build your credit by allowing you to check your FICO score online. There may also be the opportunity for a refund of your initial safety deposit and these cards can be an important steppingstone to moving onto an unsecured mainstream card in the future.
What are the cons of a Secured Credit Card?
You will need a deposit amount to cover your credit line before you even begin, which may be a struggle if you are in a bad financial state. There will also be higher fees and APR on some secured credit cards which you will need to be aware of before you start spending.
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What is an Unsecured Credit Card?
An Unsecured Credit Card has been specially created by credit card issuers for people with bad credit. You will not have to pay a deposit but will be subject to extremely high APRs and fees to cover the higher risk of lending your money.
What are the Benefits of an Unsecured Credit Card?
An unsecured credit card will be easier to access and will not require a security deposit or collateral to get a line of credit. So, this may be a good choice for you if you are put off by the deposit requirements of Secured Credit cards.
What are the Cons of an Unsecured Credit Card?
An unsecured credit card for bad credit score holders is likely to have high fees and APR. it is also unlikely to help you in building your credit score in the way that a secured card will. If you are not extremely strict with yourself, you may find yourself racking up a huge amount of debt at extremely high-interest rates.
For this reason, you should always make sure to do your research and ensure you are aware of the interest rates before you apply for the card and start spending. If you are not careful you may end up in a worse financial position than when you started!
How Can You Improve Your Credit Score with your New Credit Card?
If you are looking to improve your credit score with your new credit card, your best bet is to try to secure a Secure Card that provides data to the three credit report bureaus - Equifax, TransUnion, and Experian. That way as long as you make sure you make your payments on time; you can start working towards improving your credit score.
Applying for secured credit cards that offer you credit in exchange for a deposit may be the first step in moving towards a financial position where you can apply for more mainstream credit cards in the future.
The Best Ways to Improve your Credit Score
A good credit score is essential to your financial security as it gives lenders a quick indication of how carefully you use your credit.