It is normal to find yourself in a situation of bad credit. Sometimes it is unavoidable due to financial difficulties. When you take a loan hoping to repay within the agreed time and then things turn upside down, definitely you will find yourself listed negatively in the credit bureaus. Such a situation lowers your credit score to a big extent. However, if your score becomes worse, there are ways you can raise it. For instance, people with bad credit can apply for credit cards for bad credit with no deposit.
Credit cards for bad credit mainly help the users to improve their credit scores. Their limits might be low, but with time, your card issuer may raise your limit depending on how you utilize the card. After all, your aim is to increase your credit scores. It is important to note that bad credit cards do not improve your credit score automatically. You have to strive to rise up. Make timely payments every month. Late payments and debt defaulting are very destructive as far as credit scores are concerned.
You might be wondering where you can get a bad credit card around you. There are various bad credit card issuers who are ready to give you credit cards even with the poorest score level. We will discuss them later in this article so just stay around. Secured credit cards are bad credit credit cards with guaranteed approval. Anyone can succeed in getting the card. The reason why secured credit cards are easy to get is because you have to deposit some amount of money to act as security.
What are the main characteristics of a credit card?
There are various features that distinguish a credit card from other cards such as debit cards, gift cards, and prepaid cards. If you look at all the cards, they look alike although in real sense they are different in many ways.
To begin with, credit cards allow you to buy goods and services on credit of which you will pay later at the end of the month. Each time you use the cards to make transactions, and then your account is credited.
Secondly, most unsecured credit cards require you to have some kind of credit history. If you do not have a credit history, then you will need to get a cosigner to stand for you when getting the card. The cosigner must have a good credit history. He or she promises to pay for the card debt if you fail to pay.
Cosigners are also important when taking first-time loans. If you have been wondering how to get first-time personal loans with no credit history, then a cosigner with good credit can help you as well.
Thirdly, credit card usage charges interest on top of transaction fees and other fees. Remember that having a credit card is like having a loan and you have to pay interest. Interest rates vary with different cards as well as different issuers.
Moreover, with a credit card, you can spend as much as you can as long as you do not exceed the limit. A credit card becomes very useful in times of emergencies where there is an urgent need for money.
In which ways are credit cards similar to debit cards?
Credit cards have various similarities with debit cards. First of all the two cards are plastic in nature. If you look at them closely, you will also notice that they are of the same size. Secondly, credit cards and debit cards require you to have an account.
There is no way you can have a debit card or credit card without an account. Even when applying for personal loans from a credit union you need to have a bank account where the union will deposit your loan. For prepaid cards, it is possible to have them without a bank account.
Both card accounts can receive money. You can have people send you money into your account irrespective of whether your card is debit or credit. Also, you can send money to someone else with either a credit or a debit card account.
In addition to the above, you can use a credit card and a debit card to pay for goods and services. Any shop and service center with a sign “card payment accepted here” can aid your card payment of goods or services rendered. You can also shop online with any of the cards using the card number.
Lastly, withdraw money from an ATM with any of the cards. Upon inserting your card, enter your PIN and navigate to the withdrawal section and choose the amount to withdraw. After finishing your transaction, pick your money as well as your card and leave.
What is the difference between a loan and a line of credit?
Although you borrow the two to repay later, there is a difference between them. A loan is a fixed lump sum amount of money that you borrow and repay in installments for a specific period. A line of credit is a revolving account that allows you to draw, repay, and redraw.
In most times, getting loans such as first time home loans with zero down requires you to show proof of income. It gives the loan issuer confidence that you will definitely repay your loan. However, some credit cards such as the secured ones do not require you to show proof of income since you pay a deposit.
Also, unsecured credit cards may require your credit history to check your eligibility. A bank may reject your credit card application if you do not have a credit history. However, it is easy to get a loan if you have a reliable source of income even if you do not have a credit history as long as you do not have a negative listing. That is why scholars are able to apply for personal loans for students with no income and succeed in getting it.
How can you improve your credit score?
If you happen to fall into a bad credit menace, there are ways you can be out. You can for sure revamp your low credit score to a high one. First of all, check all the negative listings and clear with them. Have all the collection accounts deleted? Secondly, check your credit report and see whether there are cases of identity theft and close such accounts.
The next thing you should do is to take a bad credit card to start rebuilding your credit. Again, some institutions have bad credit long term loans guaranteed approval. You can apply for the loan and earn credit scores as you repay.
Which are the 9 best credit cards for bad credit with no deposit?
There are various credit cards for bad credits. These include the following.
1. Fingerhut Credit Account
If you are yearning to prove your poor credit scores, then considering Fingerhut Credit Account will be of great help. First of all, Fingerhut reports to the three credit bureaus on a monthly basis. So definitely you will find all your payment history with them.
The card annual fee is $0. For you to apply for the card, you must be of 18 years of age and have a Social Security Number. Members of consumer counseling services are barred from applying for a Fingerhut Credit Account. Application is very fast and response is within a short time. Learn more
2. Milestone Mastercard
Less than perfect credit is valid with Milestone MasterCard. The card is very convenient as you can access your account online at any time of the day. Moreover, the pre-qualification process does not affect your credit scores. The card has high protection from fraud.
Be happy with this card as the card issuer reports your payment history to the credit bureaus (Equifax, Experian, and TransUnion). The annual fee is $35 – $99 while the regular APR is 24.9%. Moreover, you will get a long 25-day grace period for the new purchases. Learn more
3. Indigo Mastercard
The card pre-qualification does not affect your credit score. Low credit scores are welcomed. Moreover, managing the card is easy as you can do it online. Furthermore, you can access your account at any time of the day. Again, the card has mini more cases of fraud.
You will also improve your credit scores with time as the company reports to the three credit bureaus. The annual fee is $0 – $99 while the regular APR is 24.9%. The annual fee varies based on your individual credit profile. Again, avoid late payments as there are penalties on that. Learn more.
4. Credit One Bank Visa
Pre-qualify for this card within 60 seconds without affecting your credit score. The application is easy and fast. In addition, you will receive 1% cash back rewards on all eligible purchases such as gas, groceries, and services such as mobile phones, internet, cable, and satellite TV.
As time goes on, you will definitely get a credit increment as the bank periodically evaluates all the accounts and determines which accounts need credit line increment. With this card, you will get free online access to your Experian credit score and credit report summary. Above all, the card has zero fraud liability. Learn more.
5. Total Visa Card
The process of applying for the Total Visa Card is fast. The response comes in seconds so that you don’t keep on waiting for nothing. The Visa card is Acceptable by many merchants across the country and thus you will have a smooth shopping experience. Furthermore, the monthly payments are manageable.
First applicants get a credit limit of $300. Upon qualifying, you will pay an $89 program fee so that you can open your account and start utilizing the available credit. Most importantly, you need to have a checking account. Learn more.
6. First Access Visa Card
You don’t need perfect credit to get the First Access, Visa Card. You need a checking account to manage your card well. Furthermore, you will benefit from the monthly reporting to the credit bureaus by the issuer. In the process, you will increase your Scores.
Application for the card is online whereby you can get a $300 credit limit upon qualifying. The credit limit is subject to the available credit. If approved, you will pay just $95 program fee. The card is Acceptable countrywide and so you will have a smooth shopping experience. See more.
7. Surge Mastercard
Upon getting this card, you will have free access to your Vantage 3.0 score from TransUnion as long as you sign up for e-statements. Again, you will benefit from monthly reporting to the three major credit bureaus (Equifax, Experian, and TransUnion) thus improving your credit score.
With this card, a checking account is compulsory. Pre-qualification does not affect your credit score. The application is fast and the account is accessible at any time. Apply for the card and get a credit limit of between $300 and $750. The regular APR ranges from 25.90% to 29.99% and is variable. The annual fee ranges between $75-$99. Learn more.
8. Capital One Platinum Card
The credit card is applicable for people with no credit history. It means that anybody, even those with poor credit scores can apply for the card. Furthermore, the card is among the best because it has a $0 annual fee and a $0 foreign fee. The card has a $300 minimum credit line.
With this card, you will not get rewards for using it. However, despite the fact that it lacks rewards, it is a good option to increase your scores. Remember the main aim is to improve your credit scores. Learn more.
9. Petal Visa credit card
The card comes with rewards. You can earn unlimited 1% 1.5% cash back on every purchase each day. The 1% cashback comes straight away upon getting the card. The 1.5% cash back comes after making 12 on-time monthly payments.
The credit card limits are high. Get limits of $500 – $10,000. Ensure that you operate below the credit limits so that you can increase your scores. Interestingly, the card data is encrypted for security. Your data is safe. If you want to stop using the card, you can freeze it. Learn more.
If you Utilize credit cards well, then you stand at a better chance to prosper financially. Proper utilization of a credit card helps you to grow your credit scores with time. Always spend what you can pay to avoid skipping payments thus lowering your credit scores. Again, choose a credit card that is easy to manage online for convenience. Also, see the terms and conditions. Go for a card with minimum charges.