Credit Cards for Bad Credit

Credit cards for bad credit are credit cards that are specifically designed for the lender challenged individual. Any person who has a history of late or missing payments may suffer from a less than desirable credit score. This makes it very difficult for that person to obtain a credit card from a traditional lender. Even people who have bad credit need to have some source of emergency funds. Credit cards are available for individuals with a less than perfect credit history. Several banks and lenders issue these special cards to people. They are willing to give the debtor a second chance so they can begin to repair their credit.


Types of Credit Cards for Bad Credit

One kind of credit card for bad credit is the high APR card. This type of card will not have a very high credit limit, but it will give the consumer something that he or she can use in cases of emergency. The lender will start the debtor out with a low limit as to monitor his or her progress. If that person makes timely payments, the lender will grant a credit line increase in due time. This type of card may also have an annual percentage rate that is two times higher than the traditional card.

Another type of credit card for bad credit is the secured card. With this type of card, the lender is trying to protect itself by asking the borrower to submit a deposit. The lender puts the funds into a savings account and holds it as collateral against the credit line. If the borrower makes timely payments on this account, the lender will eventually release the funds in the savings account and give the borrower an unsecured line.

Although there are certain stipulations and conditions with credit cards bad credit, the debtor is still repairing his or her credit by using them. Lenders still report the payments to the credit bureau on a monthly basis.

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