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3 Unbelievable Facts About Credit Cards For Poor Credit | credit cards for poor credit

 Getting credit cards for poor credit histories are often very difficult. These types of cards are also called secured credit cards and they are usually issued by banks and financial institutions. Like regular credit cards they usually require collateral for approval. In this case, collateral can be in the form of cash.

Unlike regular credit cards, some secured credit cards require collateral for approval. Usually, you have to deposit at least $ 200 or more into a special account and then qualify for a credit line. Normally, you have to put down at least that much as a security deposit, that then determines your credit line. For instance, a $ 300 deposit would entitle you to a maximum credit line of $ 300. The downside is that if you fail to make payments as agreed, your deposit could be seized by the issuer. This means that you could lose your home, vehicle, business or other property.

Credit card issuers decide if a customer is a high risk. The credit cards for bad credit history require different methods of underwriting. The credit cards for poor credit usually have a higher annual percentage rate, higher interest rates and a higher processing fee and the monthly minimum payment. This type of card usually has a longer grace period before the start of late or missed payment charges. Credit card issuers usually also require that potential customers take out at least a 2nd mortgage on their house or car as security for the issuer. While not everyone who applies for credit cards for poor credit histories is approved, many do get approved.

If you want to apply for credit cards for poor credit histories, you must first know what kind of bad credit rating you have. The FICO credit score is the most common credit score used by financial institutions. It is a mathematical formula that determines the likelihood of a borrower making payments. A FICO score of less than 680 indicates low credit risk. People with higher FICO scores have better credit risks and lenders often offer them better rates and terms.

Different types of credit cards for poor credit histories are available from issuers such as Chase, Discover and American Express. You can choose unsecured credit cards from any of the issuers, although the terms will differ according to the type of security deposit you will need to provide. For instance, Chase requires a three percent security deposit for unsecured credit cards and requires a ten percent security deposit for secured credit cards. The percentage of security deposit required depends on the credit rating of the applicant.

Other credit cards for poor credit histories require no security deposit. They usually have less restrictive terms and are offered at a lower rate of interest. Unsecured credit cards are often offered at introductory rates and low APRs, whereas secured credit cards are offered at higher APRs and higher rates of interest. When deciding which card to choose, it is important to consider the terms and conditions of the issuer as well as the amount of the deposit required by each issuer.

Most credit cards for poor credit histories are offered by issuers such as Chase and Discover. Others are offered by banks including Bank of America and Wells Fargo. The terms and rates of the different issuers and banks vary as well. It is best to compare credit cards from several issuers to see how they rank in terms of interest, fees and charges.

Secured cards allow you to make purchases over the internet using a credit card, however you will still need to make a security deposit. Unsecured credit cards require no security deposit and also offer a low APR. This APR may be higher but there are no restrictions on the amount of purchases you can make during your introductory period. A good credit score will help you get the best deal. If your credit score is low, it may be worth applying for unsecured credit cards that do not require a security deposit.

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