For those consumers that have poor credit or a bad credit history, they still need a method to buy things without cash or a check, and there are some options that are available with bank credit cards.  Obtaining a new credit card, whether you have a good credit or bad credit, should involve a little bit of research to compare the credit card apr’s and credit card fees as well as the various attributes of the credit card.

The first option for those with less than perfect credit is to get a check card, also called a debit card, in association with a bank checking or savings account.  This is a fairly standard item to have with most new checking accounts, but it isn’t an actual credit card because you don’t have access to any credit.  You can only charge an amount that is already present in your checking or savings account with the bank.  This card allows the account holder the convenience of charging a purchase online, in a store, or at a restaurant similar to using a credit card.  In addition it has the added advantage of teaching the account holder the important fundamental of credit use – don’t spend money that you don’t already have.  This is a lesson that you will profit from as you attempt to repair your credit and rebuild a strong credit profile.

However, spending wisely is only half of the equation.  The best way to get back on track with credit is to make monthly scheduled credit card payments on time.  If you haven’t learned to do this you are severely handicapping yourself financially.  It is possible to get a credit card that allows you to improve your credit with on time payments, but these cards aren’t free.  They are called secured credit cards.

Secured credit cards require collateral for approval.  With secured credit cards, a security deposit is needed to secure the credit card.  The amount of the security deposit usually equals the credit limit for that particular credit card.  Generally, secured credit cards are for people with no credit or poor credit who are trying to build or rebuild credit history. 

The credit card limits for these cards can begin at a low dollar amount, usually around $250.  In order to get the card you usually have to pay them that amount up front so that the company has no risk.  They don’t trust you!  However, with steady on time payments they will learn to trust you and your credit limit will be increased with no additional security deposit required.  However, the increases won’t be large, and unless you continue to make payments on time you will lose the card completely, which puts you in a worse position than when you started.  A secured card is a very serious and very helpful tool to improve credit, but it takes time and diligence.

If you apply for a secured card be careful about all of the credit card terms and conditions.  There may be additional credit card fees that get lumped onto the card right away, and you’ll feel discouraged if you didn’t expect them.  All credit cards aren’t the same, and some of them try to take advantage of people who are desperate.  However, if you get a reasonable credit card with a reasonable credit card rate and fees and use it responsibly by paying all of your monthly credit card bills on time, you can receive a credit card limit increase down the road.  The extra fees and low credit lines will be worth it if it helps get your overall credit back on track.
 
Another option for those who can’t or won’t get a secured card is a prepaid credit card.  Like a check card, prepaid credit cards aren’t actual credit cards.  You purchase the credit card by paying the amount of money that you want on the card, plus some extra amount that the issuer gets for providing the card.  Then, you can only spend the amount of money you have put onto the card, which can be $100 or $1000.  The prepaid credit card can be used like any other credit card for transactions at a local merchant or for credit card online purchases.  

Although most prepaid credit cards do not charge finance fees, other credit card fees may apply, including: monthly fees, start up or application fees, over limit fees, ATM fees and more.  Be sure to thoroughly look over the terms and conditions for each specific credit card offer before applying.  Regardless of your previous credit history, shop smart and compare credit card offers to obtain the best credit card rates to fit your needs.

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