What are Credit Cards for Poor Credit?
Credit cards for poor credit are secured cards that offer consumers an opportunity to enjoy the benefits of a credit card while paying a low fee. These cards are used primarily to repair or build the credit score of people who have a lot of debt or new card members who need to establish credit. Most banks that offer these credit cards for poor credit do not perform a credit check before issuing these cards.
What are the Advantages of Credit Cards for Poor Credit?
The main advantages of these cards are that the cardholder will have a low annual fee and not have to worry about the fee rates increasing significantly. Many card companies also provide points and bonus programs that allow the user to accumulate points for merchandise, vacations and other perks. Some card companies also provide 1 – 3% cash backs while using these cards. Many credit card companies offer extended warranties on purchased items that are bought by using these cards and some companies offer health insurance or medical insurance as a perk of using their company’s card.
What are the Various Fees Charged on Credit Cards for Poor Credit?
The annual fees for these cards ranges from $0 – $79 with $59 being the common rate. A low APR rate is also charged on credit cards for poor credit and the APR rate can range from 14% to 20%. Other than the annual fee the credit card company may also charge a loading fee if you are using a prepaid card. A processing fee and an application fee may also be charged when you apply for credit cards for poor credit.
How Can I Use Credit Cards for Poor Credit to Increase my Credit Score?
By paying your bills on time every month and by spending at least 20% below your limit you can improve your credit score. While using these cards you should keep in mind that these credit cards should be used only when needed and they should not be overused. Since an increasing number of credit card companies are offering discounts if a consumer applies for 2 or more cards for their family it is always beneficial to apply for one or two primary cards and one or two cards for co-applicants.
What are Prepaid Cards?
Prepaid cards are basically debit cards for poor people with poor credit. In order to use these cards the user has to load funds on to the card and once the funds have been loaded the user can withdraw the funds. People who use prepaid cards are sometimes charged a loading fee along with withdrawal fees.
In conclusion, it can be said that credit cards for poor debit are affordable cards that are primarily used to fix and/or establish your credit rating. These cards have various fees associated with them, but the benefits of using credit cards for poor credit outweigh the disadvantages.
