Poor Credit Cards

Credit cards for a poor credit rating are generally created for individuals with a 650 or lower FICO score. There are a variety of options for a card, however we have seen a lot of changes in the sub prime or bad credit lenging industry as a result of our tumultous economy from the last several years.


1. Unsecured - you may still be able to qualify for an unsecured card. Unsecured just means that you promise to make payments and you are extended a Visa or MasterCard with a credit limit. The drawbacks to these cards are due to your low score you will be seen as a higher risk and thus pay high interest rates and have a low limit. However it will report monthly to all three bureaus and can be very helpful to build a positive payment history.


2. Secured - these cards you must secure with a deposit. You will make a deposit in the range of $200 - $5000 with an FDIC insured bank after which you will be issued a card with a corresponding limit to your deposit.


In other words if you deposited $500, your card would have a limit of $500. These will carrry a much lower interest rate of around 10%, because you have secured the account it is much less risky lending. You will have to pay an annual fee or roughly $50 but this card is a real credit card.


It will be accepted every where Visa or MasterCard is displayed. You can make purchases online and over the phone. You will be the only one that knows it is secured and the deposit you make is fully refundable - provided you don't default on your payments. And it will report monthly to the major credit bureaus.


3. Prepaid - we would really suggest this option if you are paying check cashing fees or purchasing money orders. This is also a good option if you are aggressively repairing your credit report, and will soon be able to qualify for an unsecured card.


These cards work similar to a debit card because you can only spend the money you have previously deposited in your account. There is no risk of going into debt, or paying overdraft charges, interest fees, or late payment fees.


These cards can be used just like a regular credit card. You can purchase gas, make purchase online and on the phone, rent a car ... It also will enable you to use a bill payment system to send checks to pay your bills. And you will get free direct deposit.


In sum, you have a few options for a poor credit card. While you get one of these cards make sure it is only a temporary move and take action to repair your credit - you don't just have to live with a bad credit score.