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Prepaid Debit Credit Cards
Even if you have a credit score that is not so good, you can still get access to the convenience of a quality credit card. For the most part, though, these cards will not come at the little expense as some of the better cards on the market. However, you can use credit cards for people with bad credit preliminary rebuilding tools that can help you improve your credit score over time and get back into good standing with the three major credit bureaus.
The first option that you will typically have is the pre-paid debit card. Basically, you make a deposit on the card using a bank account or set it up through direct deposit. In many cases, the direct deposit option will result in a waiver of the deposit fee or even a cash bonus. You cannot be denied from prepaid card but you can also expect to avoid all the traditional fees that usually come with carrying a credit card.
Many pre-paid debit cards also come with a free built-in credit building service that helps you to monitor your activity online and establish a plan for getting your finances on track. You can use the card to pay bills online, and you can use the online interface to make "payments" to your debit card via bank transfer.
Take the Orchard Bank Classic Cards Visa, for example. You get the same convenience and service as any other Orchard Bank credit card, but with the security and peace of mind of a pre-paid debit. They report to credit bureaus monthly, which means you could easily dig yourself out of credit obscurity in no time. Email and text message reminders make sure you always hit your bill due dates. It is available in a variety of formats, all of which charge different APRs, setup fees, and annual fees.
Secured Credit Cards
A secured credit card is much like a pre-paid debit card in that you need to make a deposit in order to open your account. However, this security deposit is held against your liability should you begin to get reckless with your spending. This is very similar to deposits that you might make on an apartment lease or car rental. As long as you are responsible and everything goes as planned, you can have your deposit back when you are finished using the card.
What is most beneficial about secured programs is that these credit cards for people with bad credit behave like typical credit cards, unlike pre-paid debit cards. There are even secured credit card offers that do not require an annual fee and provide the same grace period on balance payments and similarly lower APR that you might find on a credit card designed for someone with excellent credit. While you will also need to pay an initial set up charge, it is a small price to pay to be able to use credit again, and since they report to all 3 major credit bureaus, you may never have to resort to these rescue programs again!
The Public Savings Secured Visa Credit Card is a pretty remarkable offer to anyone who may be looking to restore their good credit standing. For a low deposit amount, you get the same access to a quality credit card that you have been looking for. You might even be able to get an introductory rate as low as 0% APR on all standard purchases. Of course, this will adjust after 6 months, but their standard annual percentage rate is remarkably low for a card designed to rebuild credit. With no annual fee, you may be further perplexed by their ability to offer such great service. Certainly, you need to make an initial security deposit, and there is a fairly higher sign-up fee, but once that is established you are in for smooth sailing.
High Interest Credit Cards
If your credit is still somewhat salvageable, you could also consider cards with higher interest rates to get you started. Some might have fair variable introductory rates that can help you get a firm footing in the credit world again. Of course, you will need to make sure that your budget affords the ability to make enough payments that you could potentially pay your balances off very quickly in order to avoid those heavy finance charges. However, your credit score will improve as long as you have available credit, so you could technically open an account and simply keep it open just to improve your score.
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