Search Engines
Anyone can perform an internet search to look for credit cards with poor credit and find hundreds of results; there are so many choices and the “small print” is so varied it can be hard to understand exactly what a consumer is agreeing to.
Many credit cards offer guaranteed acceptance regardless of credit, but the consumer must read through a list sometimes several pages long, to try to find the information they are looking for most.
Below is some information to help distinguish one kind of “credit card with poor credit” offer from another; each company will have its own small print naturally but this should clarify some of the common terms used for credit cards.
Pre-Approved And Acceptance Guaranteed*
Credit cards for poor credit offers which include the terms pre-approved or acceptance guaranteed are almost always followed by an asterisk (*); this is because the terms and conditions will state that the card holder must meet certain qualifying conditions.
Common qualifying conditions will include income, time of employment, time at residence, and of course credit rating; the exact amount will vary by credit card, most will require a minimum of 12,000 dollars annual income and six months of continuous employment.
When residency is an issue the company may also require a minimum of six months at the address and most charge a higher annual percentage charge the lower credit rating the applicant has; while the company will accept any credit they will charge the people with poor credit higher annual fees, annual percentage rate, and possibly require a deposit.
Secured Credit Cards
Secured credit cards for poor credit applicants may charge a higher annual percentage rate like the unsecured variety; the major difference will be that there is less qualifying information because the “credit” available on the card is pre-paid in full by the card holder.
This type of credit card for poor credit applicants works much like a debit card to a checking or savings account except balances left on the credit card are charged a monthly fee based on an annual percentage rate; these balances are also subject to minimum finance charges.
Pre-Paid Credit Cards
Pre-paid credit cards are somewhat different from secured credit cards because a pre-paid card will have no annual fee; it is more of a gift card with a Visa or Master Card logo than a true credit card.
These credit cards for poor credit applicants can seem like a good option because the company doesn’t check credit or employment history; but because this isn’t a true credit card it will not improve any credit rating or good spending and payment habits will not be reported to credit agencies.
Why Get A Credit Card
Credit cards for poor credit applicants are a good tool to turn poor or terrible credit around after time; the trick is to get a credit card with a small limit to start and try to pay off new debt each month instead of carrying a balance.
This is debatable by credit experts, some credit experts say to carry a balance and pay just a bit more than the minimum to build credit, while others suggest paying off the balance monthly.
Credit cards for poor credit applicants should be paid off monthly because this lessens the risk of getting into further financial trouble, establishes a good payment pattern, and shows future creditors on time regular payments; many creditors look for regular on time payments, when considering offering credit.