Bad Credit Cards Can Help Your Credit Score
A credit card that can be gotten with a poor credit rating is known as a bad credit card. These cards give those with bad credit a chance to improve upon the credit rating they have. For those people the cards act as a rescue like this. Those that were unable to control past spending urges will find these bad credit cards provide needed training.
Secured credit cards are what these bad credit card cards are called. The person is required to open an account that maintains a cash balance with the supplier of the card in order to obtain one. What is the reason for this? Credit card suppliers are in business and they find it hard to trust someone that has not fulfilled payment obligations in the past. Profits are what business is all about and profits are put at risk by this. The balance on the account will normally earn interest from the bank or company providing the credit card. This should be checked with the company providing the card. The cash balance in the account will be the deciding factor of the credit limit that is placed on the credit card for bad credit and it is normally fifty to a hundred percent of the balance of cash. Debit cards are another name these bad credit cards are known by and this gives credit to the fact that they are more a debt giving item than a credit giving item.
The market has numerous bad credit cards available. There are four things in particular that need to be taken into consider when looking for a credit card for bad credit that is suitable for you. The amount of the minimum balance that the bank requires you to keep, how much credit (what percent of the balance will be available for spending on the secured card), any fees involved in the obtainment of the card and how much interest will be earned from the account balance. No fees or other charges will be associated with the perfect credit card for bad credit and the smallest amount possible or a zero minimum would be required to be maintained. The credit limit will also be anywhere from ninety to a hundred percent of the balance. A decent rate of interest will also be offered on the ideal credit card for bad credit.
The concept of bad credit cards is good for those that have a poor credit rating by allowing them relief by allowing them to partake in the benefit of credit cards to improve credit standings.
Watch the video related
Apply for a credit card with bad credit by getting a friend or relative to add you as an authorized user, fill out a co-borrower application or get a secured credit card account. Reestablish credit and get a credit card with bad credit usingtips from the vice president of a bank in this free video on credit counseling. Expert: Stephen Fawehinmi Bio: Stephen Fawehinmi is the vice president of business banking at the Bank of Nashville in Nashville, Tenn. He has been a lender for more than 10 …
Help answer the question
I have roughly 5 -10k in bad credit card debt. I was wondering if I pay them off, will I get my cards back ?
Its been over a year since Ive been able to make any type of payment on them. Also, they all been turned into collection agencies. I know I will have to build up my credit again. I was just wondering if the cards I have will be turned back on again, or will I have to start fresh ? Also, lets say I was able to pay off all my bad debt tomorrow, will my credit report be cleared of all the bad things ?
bad credit cards
Tags: bad credit cards, banks, business credit cards, cards, credit, crisis, financial, low interest credit cards, visa credit cards
This entry was posted on Thursday, August 13th, 2009 at 4:47 am and is filed under Loan. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
August 13th, 2009 at 4:53 am
Wow, I am blown away at the lack of real information out on the web. The authorized users method has been dead for years. The reporting agencies are not rating them anymore. Stop the lies, I help people free everyday. My husband and I were in the collection business for 15 yrs before getting into the mortgage business. We see bad credit everyday. We can look at your report and educate you on the things you need to do to better your score. Most times it may cost $200-$300 (not to us) to start.
August 13th, 2009 at 5:19 am
having too many cards is bad for your credit score, yes having access to lots of credit is good but this should be due to having equity in a house. the biggest marker is your debt to income ratio, also you need to pay your bills on time and have a history of repaying loans in a speedy fashion
August 13th, 2009 at 5:58 am
Only if you do not manage them well.
The number of credit cards a person has is not important, how they manage them is.
Keep your balances below 30% of your credit limit and pay on time every month and you will be fine.
I had 14-credit cards at one time and my score was over 750. I only have 8 now and it's still over 750 because I manage them well.
August 13th, 2009 at 6:16 am
I am an authorized user on my wifes credit card that she added me to after having it several years, the creditor has been reporting on me ever since I was added.
August 13th, 2009 at 8:54 am
So You can get terrible credit and then in 7 years its back to neutral?
August 13th, 2009 at 12:35 pm
i work for a major canadian bank in the credit deptartment, and haved worked in other financial institution before all in credit, first of all auth user are never reported to the credit bureau, there legal contract that binds them to the card says clearly that only the primary is liabal and he only will be reported to the credit bureau, co-ap theory is valid if you are the primary and someone is co signing to become co-ap with good credit to support your application, secured crdit is the best
August 13th, 2009 at 4:10 pm
Wow you are very informative rapmasterjim. I never thought about it that way thanks!
August 13th, 2009 at 4:27 pm
From my understanding, yes. I had some derogatories and I expected them to be gone after paying them off, but then I found out about the 7 year rule. My derogs were from 1999-2001. They’re all gone now. It’s like they never existed. I marked the days on the calender to know when they were supposed to go away, the following month I checked my credit report, if it was still there I contacted the company to tell them to take it off. I also celebrated the day the dreogs were taken off. =)
August 14th, 2009 at 4:46 am
Well, here's the answer to settle your "vicious argument".
1. Payment history- 35%
2. Total debt vs. available credit- 30%
3. Length of time establishing credit- 15%
4. Types of credit esrttablished- 10%
5. Inquiries and New accounts- 10%
Having said that, when you cancel credit card accounts, especially the ones with a 0 balance, a couple of things happen that lower your score.
1. You shorten the payment history for a positive account that's opened.
2. If the cards have been opened for a while, cancelling the accounts shortens the average age of accounts giving the appearance that credit has been established in a shorter amount of time.
3. And most importantly, you decrease the cushion of available credit versus the total debt that you owe, making it look like you owe more than you're capable of borrowing.
If anything, request a line increase with the cards that you have before applying for another card. It looks better for your score that you have accounts opened for a long time with higher limits than a bunch of recent cards that have been recently opened. For example, it's better to have a card that's been opened up for a couple of years with a $3000 limit, than to apply for a couple of $500 limit cards.
August 14th, 2009 at 12:20 pm
Get a credit card from local bank and pay it in time. You also can use this service to avoid common mistakes while buiding credit and pre-estimate future scores for different scenarios of payments – credit-report-score.10001mb.com
August 14th, 2009 at 2:48 pm
Have you tried contacting the company to try and get the derogatory taken off? If they can’t or won’t do it then you have to wait 7years or so from the time it was reported as a derogatory before it will be removed. The credit game sucks.
August 14th, 2009 at 3:36 pm
It’s not about that, it’s about having good credit so you can maybe some day be issued a credit card or if you need a loan for a house. Not everyone has 50k laying around….
August 14th, 2009 at 6:19 pm
Canceling your credit card will not hurt your credit SCORE. You will help your debt to income ratio (good) but you also will not be building a credit HISTORY.
We went to all cash several years ago and the only thing that it hurt was that we didn't have a recent credit history. We had previously paid off credit cards, car loans and were working on our mortgage but they wanted a current credit history. If you already have a mortgage, don't need anymore loans then cancel them. If you will need the current credit history then close one of them, use the other, pay it off each month and keep building your credit history. Otherwise, listen to Dave Ramsey….use cash get rid of credit.
If you need to reserve a hotel or air flight use your debit card with the Visa/Mastercard sign on it.
August 15th, 2009 at 1:58 am
Ideal is between 3-5 with balances below 30% of your credit limits and good long payment history's.
Actually there is no cap, I once had 14 credit cards with well over $100,000.00 in available credit and my scores were all over 800 because I always paid them in full every month.
The trick is not how many credit cards people have it's how they manage them that counts.
I now only have 4 still pay them in full every month and all of my scores are still well over 800.
I actually make several hundred dollars a year off of my credit cards due to the cash advance rewards and never pay a cent in fees or interest.
Not bad for using someone elses money for free.
August 15th, 2009 at 6:33 am
buy a car or furniture, anything on time and make the payments.
August 15th, 2009 at 9:34 am
It would depend on your personal credit file.
http://www.myfico.com has some great info on how the bureaus come up with your credit score… you'd be surprised at what people look for!
For example, I used to be a loan officer for a mortgage company. If someone had $10k in medical bills, we didn't care. If they had maxxed out credit cards, though… we had to come up with an excuse for the lender to hear.
A direct link to some free downloads on credit score information – http://www.myfico.com/crediteducation/brochures.aspx
August 15th, 2009 at 7:18 pm
thanks for the info, i am from montreal do you know or have any contacts for credit in montreal?
August 16th, 2009 at 12:41 pm
no credit card that i kno of offers zero percent for more than a year,
my advice is to shop around for a low intrest rate because usually a retail store will have a card of 22 peecent