People who possessed a history of bad credit are still able to apply for a credit card as there are a number of companies which are offering them a chance of repairing this bad reputation. These companies issue cards to those people who are unable to get them from any other place. Therefore a person, who has a poor credit cards history and desires to remove the tag of bankruptcy or foreclosure from him / her, can easily apply for a poor credit card.
Common types of credit cards:
Today there are various card product options to choose from but two products are very common; One is an unsecured credit card and the second is a secured one.
1. Unsecured cards:
If a person goes for this product, then he / she does not need to deposit anything as a security. However, this card is very expensive as compared to other cards. Although the unsecured card holder does not deposit any security yet he / she has to pay high charges, some of which are upfront while others are ingoing. It is possible that some people with bad credit are ready to pay all expenses related to a credit card but before obtaining approval they have to prove that they are able to pay the charges and fees.
It is really simple to provide a proof to a lender. For this an applicant has to give monthly salary or income statement to the lenders. Through the statements, they ascertain whether the applicable is able to disburse different charges and fees related to the card or not. If the lender finds anything unsatisfactory, he rejects the application; Otherwise it is approved.
2. Secured cards:
As far as a secured card is concerned, a card holder has to deposit some amount as a security with the issuing bank. The interest rates and charges of this credit card are lower than the unsecured one. In case the card holder becomes unable to pay the withdrawal amount, interest rates and charges, the issuing bank or lender has a right to use or keep the deposited amount.
Things to consider when an applicant goes for a credit card with a poor credit history:
1. Whether a person applies for a secured or unsecured card, the intention should be only to rebuild the reputation and to repair the credit.
2. Furthermore, after getting a card he / she should pay charges and fees on time and also try to keep the balance as low as possible. If he / she does this, then the lender can offer a card with better limits and fewer charges.
3. An applicant must note one important thing: if he / she is unemployed or does not have any source of income, it becomes difficult to get a card with the bad history of credit. The reason is that the lender has to check the applicant's financial condition. When a person has not anything for making the payment of recurring charges of a credit card, then how will a lender give the right to use the card's limit?