There are a number of companies offering both secured and unsecured credit card options for consumers with poor credit scores. But consumers should be aware that the majority of these offers will be of the unsecured variety. When analyzing these cards offers there are a few key elements that should be carefully considered.
Credit and cash are two things that make the world markets turn, allow companies to grow, and are often two problems that people can’t seem to figure out. Just like we are all born the same, we all start off with near-perfect credit. It is the individual choices we make after we start our credit history that either keep, increase, or decrease the score and give us a “bad credit” report. For this reason, in this article, we will be discussing a few different things to look for in credit cards that are specifically offered to people with “bad credit.”
What To Look For In A Credit Card For Bad Credit
If you have bad credit, you shouldn’t feel bad about yourself, because millions of Americans are in the same place as you. All you have to do is accept the fact that you have bad credit, and make a plan to change it. There are a few different options for your situation, which include getting a secured credit card, getting a regular credit card with ridiculous fees, and reading the rest of this article to find some credit cards specifically for people with bad credit.
What Is The Difference Using a Secured Card to An Unsecured Credit Card?
A secured credit card is a credit card that is backed by a deposit of cash that you make before you even receive the card. For example, if you’re getting a secured credit card with a limit of $1,000, you will have to have the money in cash, deposit it at the bank, or transfer it in from your checking account. You may be able to increase the credit limit by adding more money but ask the provider first. An unsecured credit card, on the other hand, is one where the money is available to use from the start, without you having to deposit anything. The limit is based on the credit provider making the decision based on your income, credit history, and other factors.
How Does A Secured Credit Card Work?
A secured credit card works basically like a debit card, in the sense that you have to load it and reload it with a certain amount of money that you have to repay and keep. The more you spend and decrease your “credit”, the more your score will decrease. These credit cards are available because it is a way for credit companies to keep track of your credit, but also be sure that you will not go over the limit since they know the money you put in there is real and you cannot spend more, after what you initially put in is depleted. If you don’t want to pay extreme fees for a regular credit card, then the following are some good options for you, but before we list them, these are the things you will have to compare. The annual, balance transfer, and late fees associated with the card.
- Green Dot Primor Visa Classic Secured Credit Card
- OpenSky Secured Visa Credit Card
- DCU Visa Platinum Secured Credit Card
- SDFCU Savings Secured Visa Platinum Card
- Capital One Secured Mastercard
- Wells Fargo Secured Credit Card
- DiscoverIt Secured Card
- Credit One Bank Platinum Visa
- Indigo MasterCard
Capital One Secured Mastercard
The secured credit card option by Capital One has an initial credit line of $200 and provided regular reporting to all major credit bureaus. There is a security deposit that ranges in cost from $49 to $200 and is decided by the credit score of the individual. Credit lines for the Capital One Secured Mastercard can be extended after five months of timely payments. For user convenience, accounts can be managed online at any time by phone or mobile app. There is no annual fee associated with the Capital One Secured Mastercard.
OpenSky Secured Visa Credit Card
The OpenSky Secured Visa Credit Card offers credit lines from $200 to $3000. This line of credit is secured by a fully refundable deposit made by the cardholder. This deposit must be paid before the card is issued. The application process for this card is streamlined, taking only 5 minutes to complete. There is no credit check required to apply for the OpenSky Secured Visa Credit Card.
Wells Fargo Secured Credit Card
The Wells Fargo Secured Credit Card issues credit lines to cardholders from $300 to $10,000 based on a refundable deposit of equal amount. Money from cardholder deposits is placed in non-interest gaining account until the upgrading or cancellation of the card by the cardholder. Wells Fargo Secured Credit Card provides online access to all accounts. This access allows for automatic payments and provides account alerts to users. The system also provides free access to tools that aid cardholders in budgeting their money and tracking transactions. This card reports to all three recognized credit bureaus.
Discover It, Secured Card
The Discover it Secured Card requires a refundable security deposit of $200. The bank account information of the applicant is also needed. Perks of this card include 2% cash back rates on gas and dining expenses and 1% cash back on all other purchases. There is no annual fee for cardholders and payment history is reported to all three credit bureaus. Responsible usage of the Discover it Secured Card for 8 months makes cardholders eligible to be considered for transition to an unsecured line of credit.
Credit One Bank Platinum Visa
The Credit One Bank Platinum Visa offers an initial credit line of $300 with purchase rates of interest ranging from 16.99% to 24.99%. Annual fees for the first year of use can be up to $75. The Credit One Bank Platinum Visa offers an interest-free period of up to 24 days and provides text or email alerts to cardholders.
The Indigo Mastercard is accepted everywhere Mastercard is accepted. The card is easy to qualify for and even allows users with past bankruptcies a second chance at credit. The Indigo Mastercard provided added fraud protection for cardholder safety and affords users account access 24/7 from all mobile devices. This card reports to all three major credit bureaus.
How Often do These Credit Cards Report to The Credit Bureaus?
After reviewing the fees associated with the card, the limit of credit available, as well as the other requirements associated with it, the next question for you should answer should be how often do these credit cards report to the credit bureaus? These cards should report your credit to the credit bureaus the same as regular credit card companies, but that is when you have to read the fine print in the preview agreement, as well as the final agreement you sign. There may a section that will say something to the extent of, “will report monthly to one or two agencies, but not all three (Equifax, Experian, and TransUnion).” If you read anything along these lines, you should either cancel the application or speak to someone directly because this can hurt your goal of increasing or getting back to par with your credit score. What if one month you do very well, but the company doesn’t record it? Then it is as if you did nothing. Make sure to double-check the fine print.
What To Look Out For When Using These Secured Card?
- Look for a “grace period” of about 25 days
- Make sure you have a fairly easy way to upgrade to an unsecured card in the future
- Look for a deposit that you can handle. You don’t want to have a $5,000 limit if you don’t have that money in cash, ready to deposit
- Look for the lowest fees possible
In conclusion, in this article, we gave a few different credit cards to take into consideration if your credit is considered “bad.” We also answered the following three questions, how often do these credit cards report to the credit bureaus? what is the difference using a secured card to an unsecured credit card? what to look out for when using this secured card?. The best option may be for you to get a secured card for now, while you work on improving your credit report. Make sure that the credit card you end up selecting, reports your credit activities every month or two weeks so that it works properly, if not, your efforts will be in vain.