Have bad credit and want to get unsecured credit? It's not impossible, but you may pay a lot for the privilege. You can use an unsecured credit card for bad credit to improve your credit score if you pay it on time and do not go over limit. Even with bad credit, there are some banks that offer bad credit credit cards. Depending on how low your credit scores are, the problem you'll face is not finding a credit card but keeping away from high interest rates, fees, application charges and more. By comparing credit card offers, you can find an unsecured credit card for bad credit to help you start to rebuild good credit.
You may have gotten some offers in the mail for unsecured bad credit cards for bad credit customers. While they may offer you a new unsecured card, they will also add outrageous fees, which can total over $ 200, just to open an account. Some of the fees they may charge are high yearly fees, an application fee just to process your application, monthly fees if you are late or go over your maximum credit limit, and of course they will charge interest rates from 10% and up. If you are late with a payment, expect to pay $ 20-30 or more for a late fee. And your interest rate will likely go higher by another 10-15% as well. Expect high penalty fees if you go over limit too. But not all lenders charge high fees and costs. Take some time to look around for multiple card offers, and compare the costs of each. Do not just apply for the first offer you receive in the mail.
One helpful step is to search for cards offered by large, nationally-known banks or other lenders. For example, Orchard Bank, a subsidiary of HSBC, offers a variety of unsecured credit cards for bad credit clients. Find two or three card companies and then choose the one with the best rates to apply to first.
Most card companies will review your credit history and credit score in making a decision, but just as important is your income, whether you are earmarking enough to cover your bills and how stable your job is. Sometimes, your income will override your credit score, but you'll probably need a W2 job (not self-employment) for at least 3 months with the same employer prior to applying. If you can show steady employment, a credit card lender will often approve a small credit line of about $ 300 to get started.
No matter who you apply with, you will pay higher interest rates on an unsecured credit card for bad credit. But you still can avoid accepting a card with overly high additional fees. So, keep looking for a good deal until you find a card that does not start you off with a balance of a few hundred dollars before you even make one purchase!
Most importantly, after you get your new card, be sure pay on time, and really make a dent in your bad credit. Very soon your credit score will improve, and your credit card lender will be able to extend to you a credit card with better rates and fees.