Bad Credit Credit Card Application – What You Must Know
Morgan Hamilton asked:
If your credit history is less than perfect then you may not be approved on an unsecured credit card application. It really doesn’t matter at this point how you came to be in your present financial condition. You still do, however, have the option of submitting a bad credit credit card application.
So what exactly is considered to be bad credit. Well, the three major credit bureaus Experian, Equifax and TransUnion all track consumer credit activity. Whenever someone applies for a credit card, mortgage, car loan, or a business or personal loan their credit rating is checked through the credit bureaus.
Probably the most quantifiable way to judge a person’s credit-worthiness is through their credit score. Credit scores, also known as FICO scores, range from 300 – 900. The higher the score the better. Bad credit typically has a score of 580 or lower. This is known as subprime.
These are the consumers that need a bad credit credit card application because they will not qualify under any other circumstances. So where can they be found. It’s actually rather easy. Just about all card comparison sites will have a category dedicated to offers for people with a poor credit history.
There you will find prepaid, debit and secured cards. Of the three only secured cards actually offer credit. They also give the account holder the opportunity to improve and repair their rating because payment activity is reported to the credit bureaus.
Before completing one of these bad credit credit card applications you should understand that money must be deposited into an account. These funds are used as collateral to make sure payments are made on time. Interest rates are usually on par with unsecured cards and there may or may not be a fee.
Prepaid cards, also known as loaded and preloaded cards, do not offer credit in any form. They simply afford the cardholder the opportunity to make purchases wherever credit card transactions are accepted. Applicants get instant approval and there is no credit check.
Likewise, there are no checks needed for a debit card. Debit cards are in fact linked to a checking account and like prepaid cards, the account holder accesses their money. Debit cards are also usually accepted wherever other cards are as well including ATM machines.
Carefully read the terms of any and all offers that interest you before you apply. This will also afford you the opportunity to become better acquainted with the features and benefits of each type of card.
Rebecca
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