If you have a credit score below 650, you are automatically considered a bad credit customer.  Consequently, your choices can be limited compared to people with good to excellent credit scores.  If you need to apply for a credit card, what are your options?

Secured and Unsecured Bad Credit Cards

Fortunately, credit card issuers today have opened up their doors to the bad credit market.  In fact, there are a number of credit cards for bad credit that you can choose from, depending on your needs.  Generally, you can apply for a secured credit card or an unsecured credit card for bad credit.  What’s the difference between these two bad credit credit cards?

The secured credit card is the more popular choice as it has been used for repairing bad credit for a long time.  This type of card requires a security cash deposit which can range from $200 to $500 or more, depending on the desired credit limit.  If you need a higher credit line, you are expected to match that amount with your deposit.  On the other hand, some issuers offer a credit line slightly higher or a bit lower than the amount of security deposited.

What about an unsecured bad credit credit card?  This a fairly new type of credit card for bad credit.  Unlike a secured card, it does not require cash deposit.  Nevertheless, the interest rate is expected to be much higher than a secured card considering the greater risk involved in extending this account.  In addition, there are additional fees to keep the account active as well as transaction charges.

Prepaid Debit Cards for Bad Credit

There is another kind of bad credit credit card which can also be used for rebuilding bad credit.  These credit cards are known as prepaid debit cards.  Although not your regular credit card, a prepaid debit card can now be used to repair bad credit as long as the issuer offer credit reporting service to a major credit bureau.

A prepaid debit card does not come with a credit line.  Instead, the card holder is required to submit a deposit upon opening the account.  The amount of deposit will be spent as the card holder uses the card for payment.  When the balance runs out, the card holder must make a new deposit to be able to use the credit card for new transactions.

A prepaid debit card does not come with interest rate since payments are automatically paid using the funds in the debit account.  However, there is a fee for every transaction or each time the card is used for payment.  Annual fee and penalty fees are to be expected as well.

Use Your Bad Credit Credit Card to Rebuild  Bad Credit

Regardless of the type of bad credit credit card you choose, you can use it to improve bad credit or a low credit score.  The key is to use the card regularly for payments, making sure that you can submit your payments on time.  Remember, you need to show that you are capable of managing debt and credit through the use of your credit card.

By Allison May

Allison May is a credit consultant and a writer for Credit Creators. The resource provides consumers with valuable advice and information on Guaranteed Approval credit cards, Unsecured credit cards for Bad Credit and other credit-related issues. The main objective here is to help people build good credit. Add Allison on

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