Bad Credit- Get a Credit Card

by : Sylvia R Rolfe

So you have bad credit. Whatever the cause, a string of unpaid bills or bankruptcy in the last 10 years or a defaulted student loan, you can still rebuild your life. Some people just carry too much debt to be considered a good risk. No matter what the case, you can still obtain a credit card. No matter how bad your credit, you can still be granted a visa card with a limit as high as $5,000 if you know how to write the company and how to make an application.

First things first though, there's some things you need to know about credit cards. Your credit rating. This is one of the sole deciding factors of whether or not a credit card company decides that you are a good credit risk. There are three major credit rating agencies; Experian, Equifax and Transcorp Union. When you send in your application for a card, the company will contact one of the agencies which pulls your file and lets the company know if you have any bad debts in your background. If you ever defaulted on bills or walked away from your debts this information is available on your credit report. You need to ensure the information in your report is accurate. At this very minute false information may be ruining your credit rating.

Interest rates. These can be very scary words to many people. This is how credit card companies make their money. There used to be laws against charging the kind of interest rates that are common today. They were for forbidden by federal law. These high ridiculous rates were the territory of loan sharks and organized crime. Today however, they are just a part of standard business. Many credit card companies try to trap their customers with low interest rates. But in that itty-bitty fine print, you will find the interest rate jumps back up after six months. You may end up paying triple your initial interest rate. Many people fail to see this rate increase. That's what the card company counts on.

For anyone who thought they could never get a card due to bad credit, what can you do? First you should think about why you want the credit card in the first place. If you have a history of bad credit, maybe it is the last thing you truly need. Credit cards are often the leading cause of debt that leads people to bankruptcy. Credit cards affect people on a psychological level, it makes it seem as though you're getting something for free. If you really need and want a credit card despite your past, you need to apply for a secured credit card. Even those who declared bankruptcy can be granted secure cards.

A bad credit card or secured card is one in which you pay a lump sum cash upfront either to your bank or the card company itself. The card company then grants you credit for up to 150% of your deposit. Your money will often incur a four to five percent interest rate well in the hands of the credit card company. It is considered collateral for the card company. It reduces the risk. Additionally, the interest you gain on your deposit offsets the interest your pay on your monthly balance. Plus it allows you to rebuild your credit. So bad credit no longer means no credit, you just need to know where to begin.