Credit Cards For Bad Credit Can Be A Money Pit – The Motley Fool #student

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Credit Cards For Bad Credit Can Be A Money Pit

Life is much easier with a credit card, but that doesn t mean you should settle for high fees and interest rates.

Sep 7, 2014 at 9:02AM

If you are one of the millions of Americans with bad credit, it can be tough, if not impossible to qualify for most credit cards.

Student credit cards for bad credit

And while there are a bunch of credit card products specifically targeted toward consumers with bad credit, the benefits may not be worth the cost. Specifically, there are better ways to reestablish your credit and gain the freedom that comes with having a major credit card, but without the exorbitant fees and interest rates.

Some are simply expensive, while some will drain your wallet quickly

For a mild example, there are cards like this example from Credit One Bank that charges a 23.9% APR and comes with a $99 annual fee. The interest is on the high end of what I would consider the “normal” range, and the fee is high considering the only real perk of this card is 1% back in rewards on gas purchases. However, while expensive, these aren’t too outrageous.

I can’t say the same about this offering from First Premier Bank. The First Premier card has a $75 annual fee ($45 after the first year) and a $6.25 monthly fee that kicks in after the first year. Still, the real jaw-dropper is the 36% interest rate on purchases.

There is significant demand for credit cards for bad credit, but not many companies offer them. Because of this, the issuers can pretty much charge whatever they want, as long as they remain within the legal fee limits. It makes sense to some degree, since offering credit cards to consumers with sub-par credit will inevitably result in a higher default rate than cards that require good credit.

Why get a credit card at all?

Student credit cards for bad credit

Source: Flickr/ Dennis Yang

First, it makes life a lot more convenient. Try renting a car or booking a hotel room without a major credit card. It can be done, but can require massive holds on your bank account that can tie up tons of money, or substantial cash deposits.

Second, it’s much easier to establish or rebuild your credit when you have a credit card. Two major components of your credit score depend on it. 30% of your FICO credit score (the one lenders use) comes from the amount of your debts as a percentage of your available credit. Well, if you have no available credit, it’s pretty tough to maximize this part of the formula.

And, another 10% comes from the types of accounts you have, or the diversity of your credit usage. In other words, lenders want to see that you can handle auto loans, student loans, credit cards, and other account types responsibly. If you have no credit card accounts, there is a missing piece in this category.

Student credit cards for bad credit

Nothing on the Capital One Secured MasterCard looks any different from a regular credit card

Basically, a secured credit card works exactly like any major credit card. They even look the same as regular credit cards, and show up on your credit report just like any other credit card account. In order to receive one, you are required to deposit an amount of money equal to your desired credit limit into an account, which will be returned to you upon closing the account.

So, while most “bad credit” cards come with limits of between $200 and $500, with some banks you have the option of putting as much as $10,000 on a secured credit card, and a higher limit can help you use your card while keeping your debt as a percentage of your available credit relatively low.

To find a secured credit card, start by looking at what your current bank offers, as some will let you link it to your existing checking account. Or, check out this list of cards, a few of which even offer some rewards.

The bottom line here is that while a credit card is certainly necessary for reestablishing credit and making traveling easier, don’t be suckered in by one of these credit cards for bad credit. With the amount you pay in fees, you could open a secured credit card and keep your money, while having the same effect (or better, thanks to a higher limit and lower fees) on your credit report.

Then again, your credit card may soon be completely worthless


3 Great Credit Cards for Bad Credit

It used to be hard to get a credit card for those with bad credit, especially one that doesn’t burden you with high rates and fees. The good news is things have changed for the better.

So we’ve put together a list of the best credit cards with great rewards and no crazy fees for those who are rebuilding their credit.

Student credit cards for bad credit

Capital One Quicksilver offers 1.5% cashback, which is better than most cards available to those with excellent credit. The card provides an interesting promo to new cardholders. It doesn’t charge any interest on new purchases that are made with the card until January 2017.

You need to know that Quicksilver does charge a $39 annual fee, but between the 0% intro APR offer and the 1.5% cashback program, you can easily recover that fee and then make and/or save money using the card.

Student credit cards for bad credit

Barclaycard Rewards is an excellent card for those with imperfect credit. It offers a rewards program that is as good as most cards requiring excellent credit. You get 2 points per $1 spent on groceries, utilities, gas, and 1 point per $1 on everything else. In addition to the attractive rewards program, the card helps you with the credit rebuilding process. It gives you free access to your FICO score online, so you can see where you are with your credit score.

It will increase your initial credit line after 5 consecutive on-time payments, and the credit agencies usually look at this favorably. The card does not charge an annual fee.

Student credit cards for bad credit

You can get a quick pre-qualification for Milestone Gold, and it won’t have any impact on your credit score, which is different than the typical card application process. It ‘quietly’ checks your credit suitability so that there will be no impact from the pre-qualification process. Then, if you choose to accept the offer, a full credit inquiry will take place.

Milestone Gold does carry a fee, so make sure you are comfortable paying $35-$99 before you make the actual application.

As you can see, there are credit card options available even to those who don’t have good credit. Do you have any experience with these cards? Tell us in the comments below and be sure to learn about 5 essential rules to managing debt and 5 great online banks.


Credit Cards and Prepaid Cards for People with Bad Credit

Having bad credit and looking for the best credit offers for you? You have chosen the right site! We present prepaid cards and credit cards for people with bad credit history. Compare the offers at our site and submit your application online!

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  • Checking Account Required
  • Fast and easy application process; response provided in seconds
  • A genuine VISA card accepted by merchants nationwide across the USA and online
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  • No-Fee credit line increase opportunities!
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  • Checking Account Required
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  • A genuine VISA card accepted by merchants nationwide across the USA and online
  • Manageable monthly payments
  • If approved, simply pay a Processing Fee to open your account and access your available credit
  • Reports monthly to all three major credit bureaus
  • Select your favorite card design from our gallery, for free!
  • No-Fee credit line increase opportunities!

Student credit cards for bad credit

  • It takes less than 1 minute
  • Will Not Affect Your Credit Score

Are you interested in finding credit cards, debit cards, or prepaid cards that are offered to people with less than perfect credit? We offer a wide range of these types of card offers.

When money is tight, it’s good to have a few tricks up your sleeve for painlessly saving money. Everyone has heard the old advice about making coffee at home and skipping the fancy latte on the way .

October 07, 2016

If you've ever been slapped with a credit card fee, you know it's no fun at all. You can incur a fee for making a late payment, getting money out of an ATM, buying something with your card overseas, .

Ask our credit card experts and you'll receive the answers by e-mail.


Credit Cards for People with Bad Credit

Credit cards for people with bad credit are often called bad credit credit cards, since they are offered mainly to clients with non-existent, poor credit score.

These cards are available for people who would fail to get a usual credit card. Such cards have been tailored to meet certain needs and requirements of clients, who have had bad experience taking credit in the past. With the help of such options you can re-build and establish a positive credit record.

Making timely payments and keeping the account balance low are the essential points on the way to an improved credit history.

Having a credit line, such cards can influence your credit score. Once you get one of the credit cards, start using it and paying off the balance completely every month.

Such credit cards are available in numerous forms and types, with different fees and interest rates.

While credit cards are beneficial for credit history improvements, the average interest rate will not attract you.

The interest rate will vary depending on the bank and card type, though it typically ranges from 29% APR to 35% APR.

Striving to fix your credit mistakes of the past, getting a credit card serves one of the best solutions. Nevertheless, you need to consider definite rules before the application process:

  • Learn your credit history. To improve the credit score you need to possess detailed information about your credit history as well as be aware of the factors that usually reduce the score;
  • Decide on two options: either getting a credit card to enhance the score or receiving a real short-term loan;

If you have fulfilled all three points, applied for the card and have been rejected, it is not a reason to give up. Analyze your mistakes, learn the information about other card companies and apply again.

Student credit cards for bad credit

Using eligibility check you can view the credit card you can apply for.

Diverse lenders have various conditions of credit card obtaining and requirements for customers.

That is why you need to check multiple options and select the best one with instant approval, low interest rates and other advantages.

Uses and Possible Advantages Credit Cards Have for People with Bad Credit History

Bad credit cards are created for customers who experienced problems with their credits in the past. Additionally, the option suits clients with no credit history.

Belonging to these two categories, you seem to get fewer exclusive offers and considerably higher interest rates.

The category of bad credit includes people with:

  • Past credit issues, especially repeated missed payments;
  • Non-existent or limited credit history;
  • Declination by other card providers, etc.

However, credit cards will help you manage the situation, re-build your ratings, get protection benefits and receive an access to cheaper credits.

Improve Your Credit Score with a Credit Card in a Few Steps

So we know that improving the credit history with a credit card is possible, though practically the process will require some time and effort:

  • Start using your card as soon as possible;
  • Do not spend more than your credit limit;
  • Prepay the balance every month;
  • Never miss payments;
  • Take as much money as you can pay off.

As a result, such credit cards for people with bad credit provide an opportunity to obtain better rates and other advantages.


Student Credit Cards with Bad Credit

Student credit cards for bad credit

While the new credit card law (the CARD Act) has made it harder for students to get access to credit cards, many college students unfortunately still find themselves with bad credit. Whether your bad credit is the result of a delinquent loan, medical bill, or old card account, you need to rebuild your credit standing in order to qualify for low interest rates, buy your first home, lease a car, or even get certain jobs. Using one of the credit cards for students with bad credit listed below responsibly is one of the easiest ways to rebuild your credit because information about your usage will be sent to your major credit reports each month, thereby devaluing the negative information contained therein. Your goal in comparing options for bad credit student credit cards should be finding the card with the lowest annual and monthly fees, as the interest rate you get is essentially inconsequential since you should avoid carrying a balance when rebuilding credit. Our recommendation is to get a secured credit card because this type of card typically has

low fees, and the refundable security deposit you must place doubles as your credit limit, ensuring you won’t get in over your head.

Student credit cards for bad creditStudent credit cards for bad creditStudent credit cards for bad creditStudent credit cards for bad credit Student credit cards for bad credit

First Progress Platinum Elite MasterCard® Secured Credit Card

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