Getting It Even With A Bad Credit Rating
By Rudy Hadisentosa, Thu Dec 8th
By: CCN.com Yes, you can get a credit card even if you have abad credit rating. So if you have been refraining from applyingfor a credit card because you have a bad credit rating, you cantake a sigh of relief. However, this does not demean theimportance of a good credit rating. In fact this could be youropportunity to improve your credit rating. Only a good creditrating can make your loan or mortgage application sail through.Let's check what kind of credit cards are available to peoplewith bad credit rating.
Secured credit cards or debit cards are the ones which areavailable to all and sundry irrespective of your credit rating.Looks a bit surprising, doesn't it? Not really, if youunderstand the concept behind secured credit cards (or moreappropriately 'debit cards').
Secured credit cards are plastic representatives of the cashbalance in your account. So, to get a secured credit card, youwill need to open a savings account with company who is offeringthe credit card to you. This acts as a security for thatcompany. This is the main difference between secured andunsecured credit cards - you need a savings account for asecured credit card whereas unsecured credit cards don't requireany such arrangement as a savings account. The other differenceis the interest rates and fees. These are generally higher forsecured card as compared to an unsecured one.
The limit or the amount you can spend using a secured creditcard is a percentage of the balance in your savings account.This generally ranges from 50 to 100 percent. As there is nodearth of companies offering secured credit cards, you shouldresearch well before zeroing-in on the best deal. It goeswithout saying that reading the fine print is important as well.If not all, you must at least read the bits which relate to feesand charges etc. Generally, the bank will pay the usual intereston the balance in your account. However, you might as well checkthat too.
Also, you need to be careful that you don't become a target offraudsters who use deceptive advertising techniques to lurecustomers. Though the Federal Trade Commission (FTC) has beenstrict in tracking and taking action against such fraudcompanies, it's good to be on guard against such deceptions.These fraud companies advertise everywhere and generally offertoo-good-to-be-true deals. Some of the tricks used by theminclude things like - asking to call a 900 number (withoutmentioning the call charges which generally run from $2 to $50),not revealing information on fees etc, not revealing the cardtype itself or just hiding information which might be relevantto you in your decision making. It's outrageous (in fact almostfunny) to know that some companies even come up with offers ofcleaning up your credit history and some un-informed people dofall for such offers. It's an established fact that no one canclean-up your credit history other than you yourself. Also, thisis not something which can happen overnight. You need to makepayments in time and take other measures in order to get a goodcredit rating.
So you just need to be a bit cautious before you start on yourcredit repair journey with a secured credit card. However, it'snot that difficult. On an ending note, just ensure that thecompany issuing the secured credit card reports transactions tothe credit bureau otherwise your credit rating will remainunchanged even if you are good with the new credit card.
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