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The Truth About Credit Cards For People With Bad Credit
Home Finance Loans / Lease
By: Max Anderson Email Article
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When it comes to credit cards for people with bad credit, there are dozens to choose from. However, that doesn't mean they are all good credit cards to have. While some bad credit credit cards really do work towards improving a person's credit, others do nothing but fleece the pockets of those who need a second chance.

Here are seven things to look for when dealing with credit cards for people with bad credit.

1. Fees, Fees and More Fees

It is true that credit cards for people with bad credit almost always have an annual fee attached to them. That being said, a few of the questionable bad credit credit cards charge much more than just an annual fee.

One of the popular credit cards for people with bad credit advertises a $48 annual fee. Not bad, right? It wouldn't be -- if that's where the fees ended. Unfortunately, this card also charges a processing fee of $29, a one-time program fee of $95 and a participation fee of $6 each month.

That's a whopping total of $178 being charged to your card before you even get it in your hands. Considering most applicants only qualify for a credit limit of $250, that leaves you with an available credit line of just $72. Not exactly the credit card you were hoping for, is it?

Do yourself a favor... When dealing with credit cards for people with bad credit, make sure you understand all of the fees involved and don't just judge a card by the annual fee or the interest rate.

2. The Facts About Secured Credit Cards

When looking for credit cards for people with bad credit, there are two categories of cards you will be looking at. These categories are called secured credit cards and unsecured credit cards.

With a secured credit card, you have to secure your line of credit with a savings account. Sometimes your credit limit will be equal to your savings account and sometimes it can be more. It really depends on the specific credit card and your personal situation.

Now understand that when you place a deposit for a secured credit card, it goes into a savings account. This is much different from a prepaid credit card. A prepaid credit card will require a deposit as well, but it works more like an ATM card than a credit card and it doesn't get reported to the credit agencies.

Because people looking for credit cards for people with bad credit usually want to improve their credit rating, it's important that you find a true secured card and not a prepaid card. Otherwise, you're not doing your credit rating any good.

3. Cash Up Front Is a Con

We've discussed that credit cards for people with bad credit often charge fees. This doesn't, however, mean that it is acceptable for them to ask you to pay for these fees up front before they issue you a card.

If a credit card company wants you to send them money before they send you a credit card, run in the other direction. Nine times out of ten, it's a scam. You'll never get the card and you'll be out your hard-earned money.

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For more tips on getting the best bad credit credit cards, saving money and avoiding getting taken, check out, a website that specializes in providing credit card tips, advice and resources.

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