Unless you have above 700 FICO ratings, it is not easy to get low interest loans for buying a home, car, start a small business etc. That is why legitimate secured cards for people with poor credit issued by top banks provide you a second chance to learn how to manage your personal finances in a way that will not harm your credit profile. Eventually, you will be able to fix any bad credit problems and get real credit lines that are unsecured and do not need any security deposits. This is also necessary in order for you to borrow a small 300 cash advance in future.
Many legitimate prepaid or debit cards cannot be used for rebuilding a good credit history, even though they are safe and highly regarded. The reason is because of no credit reporting being done since none was extended to you via these types of bank cards.
That is where online approval secured credit cards for people with bad or no credit history can be useful. You try to get major banks to issue you new cards and hence it does not matter how bad your FICO score is. Do not get confused with other types of bank cards issued by reputable banks such as prepaid or debit cards, store shopping cards with extra discounts etc.
Unlike normal credit cards, you have to put down a security deposit while opening the new account – this acts as the spending limit on your secured card. On top of that, you need to consider registration fees, annual fees, late payment fees, high interest rates etc. That is why many consumers feel cheated when they end up paying a lot of money on their secured card accounts as well as damaging their credit ratings further. The unfortunate truth is that they are not using the legit secured credit cards the right way for repairing their poor borrowing history caused by misuse of large bad credit unsecured loans.
Always make sure to verify and get a list of all fees that can be charged on your secured credit card from the bank or issuer beforehand. There are many deceptive advertising tricks used by both small and large card companies to get more consumers to sign up for a new card. For example, you may be guaranteed easy access but this is true only if you have high FICO scores. Even reputable and reliable companies will examine your credit profile and decline you if it does not meet their requirements.
To choose a good secured credit card for fixing bad credit history, the most important criteria is to call up and verify that the card company reports your payment records to the main reporting agencies. This is very important or else your personal credit report will not reflect your new responsibilities towards debts and loans.
To avoid unneeded credit fraud or identity theft, it is always better to get an easy secured credit card from big banks and top card companies such as American Express, Discover and Chase Bank etc. Do not be tempted by the cheaper fees or interest rates, or card rewards offered on less reputable secured credit cards. If you feel that you are a victim of unfair card fees and misleading advertisements, you can file a complaint against the card issuer at the Federal Trade Commission.
Secured credit cards is also a good way for young people to establish credit history. Students can start with secured card with no annual fees. Banks will generally approve you for actual credit card after a year of usage with no late payments. Most large banks that issue secured cards will report your payment history to credit bureaus, but it is always good to check since building credit is the main reason why you are using it.
The current credit crunch has resulted in many banks and card issuers reviewing their lending guidelines and turning down consumers with less than ideal FICO scores. Even though the FTC has stated that you can still get credit with a poor borrowing history, it is not as easy as it seems and there may be very expensive fees involved. If that is the case for you, consider legitimate cards for people with bad as these allow you to enjoy the benefits of having a bank card while getting a chance to easily re-establish a good profile. As long as you do not misuse these, you will eventually be able to enjoy unsecured credit lines in a few months time.
The main reason to build up a good credit profile, is to ensure you can get cheaper loans. However, many banks and lenders are only interested in dealing with borrowers with perfect FICO ratings. Without easy access to low interest credit card approvals, the installment loans for bad credit are too expensive just for building personal credit. If you do not know the way to get of out this predicament, you will be forever caught without cheap loans and financing.