While hands down, a secured credit card is better for rebuilding credit than an unsecured bad credit credit card. The reason the unsecured cards have grown in popularity is that they are unsecured! Some people just don’t have the money to put down a security deposit. With a secured credit card, the more money you put down the bigger your credit limit. With most of the unsecured credit cards for bad credit, the credit limit will be somewhere between $300 – $800, depending on the issuer of the card and your own personal credit. Unfortunately most of these types of cards come with hefty fees that are automatically placed on the card so that the first payments made go to paying off the fees.
So why are these still a viable way to improve your credit? Click here to read on
Unsecured Bad Credit Credit Cards Explained
Firstly, unsecured bad credit credit cards were created to give consumers with bad credit a second chance to rebuild their credit. Since most banks will turn you down because of a low credit score, these banks created programs just for those with bad credit. In order to improve your credit, you need to obtain new credit lines and prove that you can now handle your credit and pay your bills on time.
Secondly, even though these card have high fees, they do serve a good purpose. Some consumers choose to wait until all the bad credit tradelines fall off their credit report and then try to rebuild credit in an effort to avoid the high fees associated with the unsecured bad credit credit cards. But if you wait until all your tradelines fall off and you have no credit showing up on your credit report. You will again only be eligible for an unsecured bad credit credit card or a secured credit. Having no credit can be as bad and sometimes looked at as WORSE than having bad credit!
Make The Most Of A Bad Situation
This is your second chance. Make sure you use the cards wisely. Make your payments on time. If you need to, set it up on an automatic payment with your bank so that you know its made on time.
TIP: Since these bad credit cards often come with a high interest rate you should make sure you pay them off at the end of the month, before your grace period ends. You don’t want to have to pay the high interest on these cards.
Use Really Bad Credit Credit Cards To Your Advantage
Overall, unsecured bad credit credit cards are a great choice for people with a low credit score who want to rebuild your credit. Regardless of the reason why your credit score is low, as long as you are willing to make the necessary efforts to improve it and maintain it, an unsecured credit card for bad credit can help you improve or rebuild your credit score and enjoy the benefits that it has to offer.
Keep in mind this is not a quick fix. It will take several months of using your card and making the payments on time for you to start to see your credit score improve.