You’ve probably received credit card offers for bad credit in the mail and wonder if they’re worth your time. You’re probably wondering if they carry the same interest rates as bad credit loans or payday loans online.
Of course, it is important to read through the terms and weigh the pros and cons before deciding to accept the offer, but it can help you raise your credit score. If you know that your scores are low, and you don’t have any credit cards or don’t have many, it might be beneficial to get a credit card.
If you have damaged credit and are working hard right now to repair it, getting a credit card can actually help you.
It might be best to choose a secured credit card because it is backed up by a cash deposit that you make. Often, it’s between $250 and $500, which is also likely to be your credit limit. You can spend the money as you see fit and make monthly payments as you would with any other credit card. However, the issuer of the card doesn’t take any risk on your creditworthiness. Just make sure that the issuer reports to the three major credit bureaus; that way, you establish creditworthiness.
Credit Card Offers for Bad Credit Can Help You Manage Money
There is likely a reason why your credit score is low, and many times, it stems from poor money management. If this is the cause, accepting credit card offers for bad credit can help you relearn money management or learn it for the first time if you never did learn. You’re more careful about using the card because you know you have to pay the minimum payment or, better yet, pay the outstanding balance off each month.
Most people get into trouble with credit card debt because they keep a running total on the card. That is when you are charged high interest rates and most of the money you pay goes to the interest rather than the principal. If possible, it’s a good idea to start using your card and paying off the full balance each month. It makes you think twice before charging items to the card and can also help you learn the value of money (and how to keep more of it from going to interest charges).
Move to an Unsecured Card (or Try to Get One Initially)
After about a year of using and paying off the secured credit card payments every month, you might want to consider moving to an unsecured card for bad credit. You can check your credit score periodically to see how much it has improved. This is what creditors look at to determine if you’re creditworthy enough to have an unsecured card. You can talk to the card issuer about getting an unsecured card or upgrading your secured card to an unsecured one. This is likely to increase your credit limit while refunding your deposit. However, you should still practice good money management by only using the card sparingly and paying off the full amount each month.
If you don’t like the idea of a secured card or want to try to get an unsecured credit card initially, you can try to do that. Just make sure that you pay close attention to what fees are involved, such as processing and monthly/annual fees. You should also check the interest rate because many unsecured cards for poor credit have higher interest rates.
It is unlikely that you will get unsecured credit card offers for bad credit in the mail; these card issuers have already checked your scores and know that you aren’t necessarily the best candidate. However, you can still apply for them directly. To find the best credit cards for you, be sure to check out the rest of the Bonsai Finance site. Here are some other articles you might find interesting:
How to get a payday loan with a prepaid debit card
Your guide to buy now pay later no credit check electronics
The easiest payday loans to get approved for to get your finances on track
Is a Fingerhut Credit Card a good option for bad credit?