Getting financial help may be hard when you have no credit history or have a bad credit score. However, credit cards for bad credit Canada can be a viable alternative for you.
Bad credit for an individual is not always caused by their poor choices. Sometimes inevitable circumstances may put you in a financial fix. These are circumstances like accidents, divorce, loss or job or even identity theft. When involved in such problems, you may end up cleaning out your bank account. This does not, however, mean that your financial obligations are on hold and without a way out of the problem, you might end up borrowing cash and if it is not enough you continue borrowing some more. This, in the long run, might hurt your credit score and even deny you a chance to get better loans that might probably set you for a better future. It is in these cases that credit cards for bad credit Canada are your only option.
Types of credit cards for bad credit Canada
A variety of bad credit cards are available for different individuals with bad credit in Canada. Depending on your lifestyle, your financial background, as well as your spending habits you can always find a loan that suits your needs. The following are some of the bad credit cards that you can apply for in Canada.
Unsecured credit cards
Unsecured credit cards are credit cards in which no security deposit is required for them to be approved. These cards are easy to get. In case of default, the lenders do not have the deposit to cover the loss. To get their money back, they may end up suing you. The court can as well get permit the lender to conduct a wage garnishment.
Secured credit cards
These cards need a security deposit to serve as collateral. Prior to receiving the card, you need to pay a certain amount of initial deposit which serves as collateral in case you are unable to make repayments. The amount of money mainly depends on the size of the credit available. Secured credit cards are easily obtained and have quicker approval than the standard credit cards. Once the customer decides to terminate their account and has completed the full payment, the lender gives back the initial deposit to the customer.
Prepaid credit cards
These cards are given by lenders who have a security of prepayments. They are a good option for you when you have a bad credit. You can use these cards to make payments as well as buying goods and services. However, these cards may not be a good option when looking to build your credit score. This is because a report is not given about your payments.
Store credit cards
Borrowers with bad credit can use a department store credit card. Cardholders can obtain such benefits as promos, one-time purchases, sales, coupons among others. Although these cards have higher rates than most credit cards, they can serve to boost your credit in a great way.
Guaranteed credit cards
These cards are offered to individuals whose credit history has been tarnished. They are offered under very lenient requirements. They are also approved faster than the other cards. Some of the lenders may offer the cards with no processing fee, no credit checks, and no employment.
Reasons why you should apply for credit cards when you have a bad credit
- Building your credit history- Credit cards are very important in building your credit score. People who are yet to established a credit history can use credit cards as a good way to do so. When you build your credit, you stand a chance of getting major loans which will take care of bigger projects and set you up for financial freedom in the future.
- Warranty extensions- When you have credit cards, the companies that offer them can extend warranties on goods that you buy using their cards.
- Car renting- When you need to rent a car, some rental companies will only rent you a car if you provide a credit card. the credit cards may have an added advantage in terms of liability insurance.
- Convenience- Credit cards offer great convenience to the cardholders. This is because you do not have to carry large amounts of cash when going shopping. This offers security for your money.
- Emergency funds- Life is full of unpredictable occurrences, sometimes emergency may occur and demand you to make instant payments. This may be tricky if you have zero cash on you. Credit cards can be used to pay for emergency and unexpected bills that may come up at any time.
Characteristics of credit cards for bad credit in Canada
- The credit cards are offered to people regardless of their credit history.
- Some lenders have minimal requirements in order to avail the credit card for you.
- The credit cards can be used for online purchases.
- The cards can be used to pay for services such as hotels and restaurants.
What you should know before applying for these credit cards
- Choose a credit card with an affordable setup fee. This is a fee that is required for the secured credit cards
- Consider the deposit required for a secured credit card.
- Always consider the credit cards whose interest rates are affordable.
We at Bonsai Finance are dedicated to offering financial assistance to our customers. Applying for credit cards with us will benefit you in that we help you to get the best options for the cards after evaluating your financial situation. We also help you through the process of obtaining the cards. We work with the most reputable lenders to make sure you meet your desires.
Credit cards for bad credit Canada are therefore a good option to build your financial background as well as improving your lifestyle. Instead if keeping your financial difficulties for yourself, trying the credit cards is an idea worth pursuing.