Unsecured credit cards for bad credit or bad credit for credit cards.
Although secured cards are usually the preferred option for people with bad credit, there are also some decent unsecured cards. You may be able to qualify for one of them, even if you have bad credit, have limited credit, or none. Because card issuers take into account various elements to decide whether or not to approve a credit card.
In addition to just looking at your credit, issuers will also want to know about your income, whether you are a tenant, or a homeowner, as well as your employment status, among other factors.
Therefore, don't assume that you will be denied a particular card, just because of the credit score. Sometimes the card is approved, to people who don't even expect it, and other times, they are denied it, when they think their credit is good enough.
Secured credit cards.
With bad credit, limited or no credit, secured credit cards are the best option.
By providing a deposit, or perhaps a refundable guarantee, to finance the credit limit, this reduces the risk for the credit card issuer. But this does not mean that you are guaranteed to have your insured cards approved. It can still be denied for various reasons, such as:
Your credit is bad enough.
Your income is below the required level.
Your personal information cannot be verified.
The issuer of this card has applicable rules that prevent you from qualifying, such as having too many applications in a short time.
In most cases, your line of credit will be similar to the amount of your security deposit. Make a $ 1,000 deposit and your line of credit will be $ 1,000. Credit limits tend not to exceed $ 2,000 or $ 3,000, and depending on the card, your maximum limit may be based on your creditworthiness. Sometimes you can make an additional deposit later, to increase the credit limit.
Insured cards usually do not offer rewards of any kind, although there are some that do. In most cases, they have quite high interest rates, and very few additional benefits. These cards are usually reported to the three major credit bureaus: Experian, Equifax, and TransUnion, like most unsecured cards.
Store credit cards.
Store credit cards generally have very low credit requirements, making them easier to obtain, unlike normal credit cards. But they also tend to have very high interest rates, and they may have a few different rules on how and where you can use them. Your line of credit will generally be lower than what you get with other reward cards.
If you shop at a particular store very frequently and offer a credit card, it might be a good idea to use that card. As long as you fully understand the terms and use them responsibly, you can improve your credit and move to better cards if you want.
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