Navigating today’s society without a credit card inside your wallet can be treacherous. Need a few gas after hours when the cash window is closed? Forget it. Make an airline or motel reservation? No can do. How about renting a car? Uh-uh. And you better forget about shopping online, because there is no paper money slot on your PC.
Many people who would like to use credit have difficulties qualifying. The primary reason is that they have damaged their credit score by defaulting on a credit agreement in the past, and therefore banks and other banking institutions consider them a bad risk, therefore denying their application.
For those who would like to repair their bad credit with a brand new card, there are options available.
Secured Bank cards
A secured credit account, like a secured loan, is backed up by collateral–something of value which you accept to surrender in case you do not make your payments. In the case of a secured card, your own collateral must be cash.
Some banking institutions will hold your cash in a “security” be aware of up to a year. Meanwhile, you will use your VISA, MasterCard, or other assistance to pay bills and make purchases, paying at least the minimum payment each month on your card balance. You will pay additional fees for your secured cards, including:
Interest on unpaid balance each month ranging from 9. 9% in order to 19. 9%
Account set-up fee ranging from $20 to $99
Annual fee ranging from $19 to $99
Program fee of up to $100
Past due payment fee of approximately $30 each time
Cash advance fee of $5-$10 each time you get cash from your card
More than credit limit fee if you exceed your preset limit
Other miscellaneous charges
Meanwhile, if your bank is keeping your initially paid cash in the “security” account, they may not be paying curiosity to you as they normally would for the conventional savings account. When the year is up, they may offer you an unsecured card, in case you have made your payments faithfully, and return your security deposit.
Other banking institutions or firms which issue credit cards might use your cash collateral to pay your monthly bill for you by immediate withdrawal from your security account, and permit you to load more cash in to that account to maintain or raise your credit limit.
Any secured CLOSED CIRCUIT has a credit limit range, and within this range–$200 to $5000, for example–your credit limit matches the cash amount you put up as collateral. So if you deposit $250 as security, your credit limit will be $500. Note, however , that your financial institution may withdraw its fees with this amount, effectively lowering your credit limit.
To obtain a secured CC, you must meet the minimum requirements of your issuing institution, including:
Be 18 years of age or old
Be a U. S. Citizen
Provide proof of citizenship such as a Ssn
Have a physical address
Provide your delivery date
Banks are required by the Patriot Act to collect personal information such as your birth date and social security number regarding identification purposes. Because some establishments use this information to inquire into the credit history, make sure that the card you’re looking for is a “no credit check” card.
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If you do not like the idea of having an amount of cash tied up in a bank account as security, you do have extra credit options.
Prepaid Debit Card
While not technically a credit card, a pre-paid debit card is quite similar to a secured card in that you download it with cash to determine your personal limit on purchases–when you go out of cash, the card becomes inactive.
One drawback in using a prepaid debit card is that it will have no effect, either positive or negative, on your credit report. A secured CLOSED CIRCUIT, in contrast, can help repair your previous credit mistakes if you keep your payments up to date; banks and companies which issue secured cards do statement your performance to the credit agencies, while a prepaid debit card does not show up on their radar.
The many positive aspects involved in using a prepaid debit cards include:
You can’t overextend your finances
The fees are lower than a card’s fees
Your cash is not tied up; you are able to spend what you load onto the
It is easy to obtain with no credit check
This doubles as a credit card in most circumstances
If you place importance on functioning towards a better credit score but usually do not wish to make a large outlay of cash to secure a credit account, there are unsecured, no credit check bank cards available.
Unsecured No Credit Check Credit Cards
You may be thinking that getting an unsecured credit score account with a dubious credit history is as easy as opening up one of the countless pre-approved card offers you receive within the mail each day. If you have read the fine print on a single of these offers, you know that pre-approval is contingent upon an acceptable credit investigation. In other words, these offers are often only useful to individuals with good credit scores who already have credit cards.
With a bad or nonexistent credit history, you will have to appearance harder for an acceptable credit card offer. There are several card programs designed especially for people like you, but they come with a high price tag. Once you have defaulted on a loan or additional credit program, you become a bad risk to a credit company. In order to counteract the risk, the company will charge high charges for giving you a second chance with managing your credit.
Some of the fees you will encounter in an unsecured, no credit score checking card include:
Interest on your delinquent balance starting at 9. 9% annually and up
A one-time system fee–$100 or more
Annual fee which usually varies according to the issuing institution
Month-to-month service fee
Minimum finance charge, even if you do not carry a balance
Money advance fee, either a set amount or percentage of your advance, whichever is definitely greater
Late payment fee
More than limit fee
Monthly account fee (yes, in addition to the service fee in some cases)
Credit limit increase fee-as a lot as $25 for each increase
The fee roster and fee amounts can vary wildly on an unsecured, no credit check card, so make sure you shop around before committing to any particular plan. In one finance company’s example, as soon as it deducts all applicable fees from an initial credit limit of $250, the actual limit is whittled down to $71. Pretty dramatic, isn’t this?
However , if you stay focused on your objective of rebuilding your credit score, limit your credit charges to what you have budgeted, and above all, pay your bill on time each month, you will be able to obtain a more conventional credit card in the future as well as other inexpensive financing.