People with bad credit think that they do not qualify for good credit offers. It may be possible that they may have tried to get credit from a few lenders but when they failed to get them. Secured cards are quite suited for people with bad credit.
For secured card, one has to submit a security deposit, which guarantees you a line of credit for that amount. For instance, if you require a $700 line of credit, you have to deposit $7000 with the issuer, which immunizes your account. Since there is no much risk here for the card issues, there is more chance of the approving applications for people with bad credit or no credit.
You can use this secured card to make transactions, build credit like every other cardholder. This is in fact, a good opportunity for people to use the secured card wisely, restore and build credit. When you close the account, the security deposit is refunded sometimes with interest.
Apart from the option of secured credit card, there are also offers of some really good cards from mainstream banks. Here are some of the options that you can exercise –
1. Capital One Secure MasterCard – The card has a low annual fee of $29 and can help people with bad credit come up in a big manner. Though most secured cards offer spending limit equivalent to the amount you deposit, this card is a hybrid between a regular credit card and secured card. This is preferred as one of the best choices for people to get back into the traditional system of credit. You have to put $49 and can get a credit line of $200. By depositing money like $200, you can actually increase the credit line to $3000. Capital One also ensures that one you have been able to improve your credit score, you will get preference to avail of one of its unsecured credit cards.
2.Wells Fargo Secured Visa – You can apply for this card only if you have been out of bankruptcy for one year and there are no liens unsettled against you. Your security deposit between $300 and $10,000 can set the credit limit. There is a $35 annual fee.
3.Orchard Bank Classic Card – HSBC’s subsidiary Orchard Bank says that all applicants who give a security deposit will be approved irrespective of credit score being dismal or if you have declared bankruptcy. There is a $200 minimum security deposit, with no annual fee for the first year and then $35 annual fee from the second year.
4.U.S. Bank Secured VISA – This bank diverts your security deposit into an interest-savings account with a $35 annual fee.
Getting small installment loans like an auto loan or a small personal loan (best from a credit union, or bank) to the tune of $1000 which you can pay back on time, can help rebuild your credit. Though you will have to cough up a higher interest rate, the fact that you have an active installment account on your credit report can boost your score. Also don’t close your credit account because they may hurt your score. Most importantly, pay your bill on time, all the time because skipped payments can only ruin all the good work you have done.