For those of you struggling to get yourself out of a bad credit situation, there is one excellent financial option for you. You can get what’s called a secured credit card. A bad credit credit cards no deposit solution will help you repair your credit and improve your standing with lenders – paving the way for you to apply for regular unsecured credit cards.
Secured Credit Cards
A secured credit card is part debit card and part credit card. It looks just like a regular plastic debit or credit card, but it functions differently. It uses a combination of your own funds and a credit line from the lender.
How do you build up bad credit by using a secured card?
Well, 35% of your credit score comes from your payment history. By purchasing small items and making your payments month after month, that goes a long way towards repairing your credit.
Did you know that 30% of your credit score comes from your credit utilization? It’s also called the debt-to-credit ratio. You can raise your score by keeping your debt-to-credit ration down to less than 30% of the balance. Multiply your credit limit by .3, and that will give you the maximum credit threshold. As long as you keep it under 30% of the total credit limit, your score will keep improving.
Bad Credit Credit Cards No Deposit
When shopping around for a secured credit card, you’ll notice that many of them require a deposit amount. It’s not very large, usually $99, but it is required.
What about secured credit cards with no deposit required? Several are offered from different banks and lenders. Since you have options, you should easily find a couple that you can apply to. Just be careful, however, and don’t apply to too many of them. The more you apply, the more times your credit history is accessed. These are called inquiries. Too many inquiries, and your credit score starts to get smaller.
Using Credit Consciously
Although these secured cards are great for when you have bad credit, keep in mind that they are still provided by lenders who have to get paid, too! These cards might have annual fees, processing fees, or other hidden fees attached to them, so watch out for those.
With a little patience and diligence over your purchasing history and spending habits, you can definitely use one of these secured credit cards to raise your score. Having that bad credit credit cards no deposit option has helped many consumers repair their credit.
If you suddenly find that you can’t access one of these credit cards, we have another solution, too. You can apply for a personal loan online. These loans do not require good credit, and you get the money in a matter of hours. This is extra convenient if you need money quickly, as it can take 10 days or more to get access to your new credit card.