Credit Cards

When it comes to choosing a credit card there are an increasing number of credit cards from high street banks to  even supermarket branded credit cards.

Choosing a credit card is perhaps easier if you have an excellent credit rating although the then number offered can then make this task difficult.

For an increasing number of people today getting a credit card is becoming harder, perhaps you have had a few difficulties in the past and the high street credit card companies still won’t give you a chance. Or maybe you are looking for your first credit card getting declined only makes matters worse next time you apply for credit.

There are many financial institutions that offer bad credit credit cards. You only need to know your available options and the company that offers this type of card. There are millions of people with bad credit score and they cannot get traditional credit cards. However, banks and financial institutions realize the fact that these people are not completely broke. They do have the paying capacity. In fact, such people can be charged higher interest rates because of their bad credit record. Because of these reasons, banking institutions offer special credit cards that are designed especially for people with bad credit history. There are various options that you can use to get a credit card if you have a bad credit record.

Different Types of Credit Cards


Debit or Prepaid Card
As the name suggests, you have to make a payment beforehand. This payment works as your remaining balance amount. Every time you purchase anything, the amount is deducted from your balance. The remaining balance is your next credit limit. This type of bad credit credit cards work on reducing balance principle.

Secured Credit Cards
This type of credit card is somewhat similar to traditional credit cards in the sense that you have to pay interests on the credit amount. This method requires you to deposit an amount in your savings account. This secure deposit amount is your purchase limit. If you make timely payment then you can use this type of credit card to improve your credit score.

Unsecured Credit Cards
Higher interest rates are charged on unsecured credit cards. It is available according to the credit score of the person. There is lower limit but there is no need to deposit any amount upfront. This card can also be used to improve the credit rating, which in turn helps get the traditional credit card easily.

Cosigner Card
This is a very good option to get the conventional credit cards. You only have to find a person who has a good credit score and get him or her to cosign the credit card application. The bank gives the card based on the credit rating of the person who has better credit score. As is obvious, the banks do not have any problem about who uses the card. At the same time, if you do not pay on time then the cosigner becomes liable to pay the amount. For this reason, obtain this type of bad credit credit cards only after careful consideration.

Credit Card of a Family Member
It is the best option available to you to get a usual credit card. One of your family members with better credit score can obtain a credit card and let you use that card. The risks are similar to the cosigner card. If you do not pay on time then the family member who gave you the card has to pay the amount. Besides, if you make payment on time then there is no improvement in your credit score.

Retail Store Credit Cards
These are somewhat restrictive bad credit credit cards. You can buy products only from the gasoline or the retail store company from which you get your card. It is a type of prepaid card that works on reducing balance principle. You have to get a new card after the old card amount is exhausted.

Collateral Credit Card
Usually you can manage without having credit card for some time. You can make only cash purchases. However, because of various advantages of using credit card, sometimes it becomes necessary to have a credit card. If there is no other option available and it is a must to have the credit card then you can use some type of collateral to get it. In case of bad credit credit cards requirements, inquire with a banking institution whether it will offer credit card based on collateral. Such collateral can be one of your valuable possessions.

Reviewing Your Options – Look Long Term

While these are various bad credit credit cards options available to you, it is better to choose an option that helps you improve your credit rating. This way, you will not only become eligible to obtain a conventional credit card but it will also improve your overall debt rating. Thereafter, you can easily obtain any type of debts, loans or credit cards. The best option is to spend less than you are earning and this way you can improve your bad credit score more easily.