Do you want a “Bad Credit” credit card? People with challenging credit histories often suffer unfairly from high mortgage, insurance, and car loan rates. On top of that, they have difficulties getting approved for credit cards. The whole situation can get extremely frustrating. Frequently, I recieve emails from consumers wondering what they can do to repair their credit. The first thing I say to them is to buy a credit card designed for people with bad credit. The second thing I tell them is written in bold: READ The fine print.
You can find only a limited number of credit cards for folks with bad credit. Initially, many look the same. They all improve and repair your credit by reporting to the major credit bureaus on a monthly basis. They all provide you with the Visa or Mastercard you need to make many purchases. And they are all necessary evils that can help you save 1000s of dollars in mortgage and car loan rates in the future. However, you must read the small print before you apply for one of these simple credit cards, as they often charge high yearly fees, set-up fees, and in many cases monthly fees. Here, I will examine a few examples of charges current “bad credit” credit cards bury in the small print. Of the three major cards I’ll examine, just one stands out as consumer-friendly.
Credit Card #1: This credit card charges a very low interest rate for an credit card. However, your first fine print glimpse reveals that there’s a one time setup fee of $29. Not too bad. So far, since the next charge is a one time fee of $95. So far, we’re up to $124 in expenses. That’s got to be it, right? No. Add in another $48 for that annual fee and $6 monthly in account maintenance fees. That brings the price of your new credit card to $244 the first year, and $120 each additional year. This really is no small change, and a card similar to this should be considered only if you can’t be accepted for a better credit card for bad credit.
Credit Card #2: This credit card charges a very high interest rate for an credit card. This can’t be good. But the setup fee is only $29. Maybe this card just isn’t so bad. There is certainly that pesky monthly maintenance fee of $6.50 per month which brings the cost of this unsecured credit card to $107. Maybe we’ve found a bargain. Not quite. The annual fee is a whopping $150. Yes, $150 each year. That not only brings the original cost up to $257, but additionally, you will pay $228 a year just to keep up with the credit card. There needs to be a better offer.
Credit Card #3: This credit card is obtainable as both a secured and credit card, in line with the issuer’s review of your credit history. The interest rate is average, even competitive. Now, the fine print reveals that there is a one time setup fee. However, based on your credit, this fee is often as low as $ or as high as $49. So far so good, especially when your credit is not that bad. But, there has to be a massive annual fee. Not exactly. The annual fee for a secured credit card is only $35, and then for an credit card, this fee is often as low as $39 or up to $79. So far, the price of this card ranges from $35 to $128. Now it is time for that monthly maintenance fee. This one has to be huge. Or not. Its $. That means probably the most you could possibly be charged to acquire this credit card is $128, about 50 % of what competing cards are charging.
Obviously, you will find substantial differences between “bad credit” credit cards. From the three offers we have reviewed, just one does not take you to the cleaners. In reality, “bad credit” credit card #3 offers great value. All positive changes to your credit history and credit score will lead to lower loan rates, lower credit card interest rates, lower insurance rates, and ultimately, thousands of dollars in savings. The direction to rebuilding credit has its expenses, but in the long term, rebuilding your credit with a “bad credit” credit card is the fastest and most cost-efficient way to correct the often unfortunate circumstances that have damaged your credit to begin with.
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