A Credit card is a form of payment card that is plastic in nature and allows you to buy goods and services on credit. It means that you borrow money from your bank via the card and pay later at the end of the month. Different banks and financial institutions have different terms and conditions. Some can give credit cards for fair credit with high limits while others can give you a credit card irrespective of how bad your credit is.
Credit cards are essential tools to increase your credit scores. Timely payments and continuous use of a credit card can give you a big boost on your credit score. Your overall report also becomes very good. Most financial institutions rely on your credit score to make decisions on whether to give you a loan or not. It explains why one should always keep records straight. If you are not sure how you can pay a debt, then do not take it.
There are many things you can do with a credit card. You can transfer money using routing number and account number from your account to another account of a different bank. If you are transferring money from your account to another account within the same bank, then you only need the account number of the recipient account. Furthermore, transferring money from one account is faster as compared to transferring funds across different banks. As soon as you authorize money transfer, your account is credited.
What is the importance of a credit card?
There are several advantages of having a credit card. These include the following.
i) You can send and receive money
With a credit card, you can send money to your friends and relatives. If you have a checking account that you can operate online, things are easier. At the same time, you can receive money in your credit account. Someone can send money electronically, by check or deposit in person.
ii) Pay for goods and services
Actually, credit cards are meant to ease the burden of carrying money in your pocket for shopping. In your card, you can have thousands of dollars for use. Using a credit card to buy goods and services is convenient for you and the cashiers themselves since you pay the exact amount and there is no need to look for change.
iii) Grow your credit score
Credit cards are important as they increase your credit scores with time. When you Utilise your credit card well, then you are able to increase your scores fast. Early payments and spending below your credit limit is a sure way of increasing your credit score very fast.
Some financial institutions have bad credit credit cards guaranteed approval to help those with poor credit scores to grow with time.
iv) Credit cards offer the security of your money
Imagine carrying a lot of cash in your account and meeting with robbers who definitely may take away your money. Surely that can be a great loss. Having a credit card, someone will not steal from you. Furthermore, when your card is lost, you can report to your bank so that if anybody succeeds in using the card, you are not liable in the act.
v) Cashbacks, miles, and points
Most credit card companies give you various rewards when you use your card to buy goods and services. It is a way of appreciating you and ensuring that you continue using the card continuously.
How is a credit card different from a debit card?
On physical appearance, the cards look the same. They are all plastic in nature and use similar technology to operate. However, there are various differences that arise between the cards. These include the following.
- When using a credit card, you borrow money from your bank while when using a debit card, you use the available balance.
- Credit cards appear in your credit history while debit cards do not.
- With a credit card, you can spend as much as possible within your credit limit while with a debit card, you only spend what is in your account.
What are the requirements to acquire a credit card?
First of all, before you get a credit card, you need to have a checking account. Your credit card links with your checking account. It means that you should open a checking account with your bank then apply for the card.
Secondly, you need to have valid identification documents. Before opening the checking account, you have to produce your ID. Other requirements are physical address, email address, phone number, and passport size photo.
People without an ID can also get a credit card if they have a cosigner. The person co-signing you can be your parent or any other relative or friend. He or she accepts to pay the debt if at any point you are unable to pay the debt.
Sometimes getting a credit card requires you to have some credit history. This applies mostly to unsecured credit cards. A credit history shows how you have been paying your debts.
How many types of credit cards do we have?
There are two types of credit cards. These include secured and unsecured credit cards.
i. Secured credit cards
Secured credit cards require you to deposit some amount of money before taking your credit card. The amount of money you deposit acts as your security to the credit you take.
Most financial institutions allow you to borrow exactly the same amount as the deposit. Others allow you to borrow a percentage of what you deposit.
Again, secured credit card issuers do not look at your credit history since they already have your deposit as your security. As time goes on, you get your deposit back after showing a good repayment history. Interestingly, secure credit cards charge low-interest rates.
i. Unsecured credit cards
With an unsecured credit card, no deposit is required. However, you need to have a credit history. Card issuers check on how you have been making previous payments. Information about your payment history is available with the credit bureaus.
There are credit companies that issue credit cards to only those with good credit scores while others can give you a credit card even when you have a poor or a fair credit score. It is possible to get a credit card with a 5000 limit with bad credit.
Credit cards for poor credit help you to regain your scores with time if you practice good payment patterns. As your scores improve, you also get a credit increment. The only problem with bad credit cards is that the limits are low and the interest rate is high.
Looking at the two cards, it is better to get an unsecured credit card since you will not pay any deposit. However, it is easy to get a secured credit card as compared to an unsecured credit card. You saw earlier how to get a secured credit card whereby I indicated that you have to make a deposit to act as security.
Statistics show that the more your credit score increases from bad to fair, to good and so on, the more your credit limit increases. For instance, unsecured credit cards for 500 credit scores will have higher limits as compared to unsecured credit cards for lower credit scores. The more your credit scores, the more your bank increases trust in you.
Which are the 9 best credit cards for fair credit with high limits?
They include the following.
1. Indigo Platinum Mastercard
Indigo Platinum Mastercard is suitable for fair to good credit scores. People with a credit score of between 580- 740 can get this card. The card does not offer any rewards. The annual fee is $0- $99 while the Regular APR is 24.90% fixed. Previous bankruptcy is okay with this card.
The pre-qualification process does not affect your credit score. The card account is easy to access online using your mobile phone. Moreover, the application and response are fast. The card has high protection from fraud in case you lose it. See more details here.
2. Avant Credit Card
The card accepts fair to good credit scores. Such scores range from 580-740. If your scores fall within that range, then you can consider applying for an Avant Credit Card. However, do not expect any cashback, miles, or points. The annual fee is $39 while the Regular APR is 25.99% variable.
There are no deposits required since the card is unsecured. Moreover, your score increases gradually if you utilize the card well since the issuer reports monthly to the credit bureaus. The company operates in almost all states except Colorado, Iowa, Vermont, West Virginia, and Wisconsin. See more details here.
3. Milestone Mastercard
Milestone MasterCard is there for you if you have credit scores between 580-740. Although the card doesn’t offer cash back, miles, or points, it is a good tool to increase your credit score as you benefit from buying goods and services on credit.
The annual fee is $35-$99 while the regular APR is 24.90% fixed. The application for the card is quick. Upon getting the card, you will be able to access the services online using an app on your smartphone. Furthermore, the pre-qualification exercise does not alter your credit score. Again, it has excellent protection from fraud. See more details here.
4. Deserve Edu Mastercard for Students
Now if you are a student, getting the Deserve Edu Mastercard for Students Will help you greatly. First of all, you will benefit from 1% unlimited cash back on all purchases. Moreover, you will be paying a $0 annual fee and a Regular APR of 18.74% which is variable. You may also receive one year of Amazon Prime Student after your first purchase.
Again, feel secure with cell phone protection of up to $600. Incidences of fraud are mini more with this card. Moreover, there are no international transaction fees on purchases overseas. You do not need a Social Security Number required for international students to apply. Lastly, receive a $30 bonus if you refer a friend. See more details here.
5. Discover it Student Cash Back
Discover it Student Cash Back credit card will never ask for any credit history. Moreover, you get 5% cashback on daily purchases at different places each quarter like grocery, restaurants, gas stations, select rideshares as well as online shopping, up to the quarterly maximum when you activate. Also, automatically earn 1% unlimited cash back on all other purchases.
With this card, you will not pay annual fees. The Balance Transfer Intro APR is 10.99% for 6 months while the Regular APR is 12.99% – 21.99% variable. There is no late fee on the first late payment. Moreover, there’s no APR change when you pay late. See more details here.
6. Discover it Student chrome
With this card, you will earn 2% cash back at gas stations as well as restaurants on up to $1,000 in combined purchases each quarter. Also, automatically earn 1% unlimited cash back on all other purchases. The good thing is that there is no credit history needed here.
The annual fee for this card is zero. The Balance Transfer Intro APR is 10.99% for 6 months while the Regular APR is 12.99% – 21.99% which is variable. There is no late fee on your first late payment. Also, there’s no APR change when you pay late. If you live in the US, you will receive 100% customer care. See more details here.
7. Reflex Mastercard Credit Card
Reflex MasterCard Credit Card is suitable for fair to good credit score. People with credit scores of 580-740 can apply online at Celtic Bank’s secure site. The card does not give cash back, miles, or points. Application is fast and the response comes in seconds. There are zero fraud possibilities with this card.
The good thing with this card is that you will increase your scores if you use it responsibly as the company reports to the credit bureaus every month. Moreover, you will be privileged to use the card anywhere accepting MasterCard. See more details here.
8. Surge Mastercard Credit Card
The card issuer does not require any credit history to give you the card. All credit scores are valid. Moreover, you have to open a checking account before getting the card. The application for the card is fast and takes a few minutes.
With this card, you will increase your scores faster as long as you use the card well. Use your card at all places accepting MasterCard. You will also get free assess to the Vantage 3.0 score from TransUnion when you sign for e-statements. See more details here
9. Total Visa Unsecured Credit Card
Total Visa Unsecured Credit Card does not offer cash back, miles, or points. The card application is easy and fast. Again, the Visa card is Acceptable by many merchants across the US. Moreover, the monthly payments are manageable.
Upon applying for the card, you will get a $300 credit limit which is subject to available credit. The card issuer allows you to select your favorite card design from the company’s gallery for free. The Intro Purchase APR does not exist with this card. See more details here.
Credit cards have been helping many to lead a comfortable life over the ages. The fact that you can use the card when you do not have the money makes it a wonder card. The secret of increasing your credit score is utilizing the card well by making timely payments and regularly using the card. Dormant credit cards, as well as defaulted payments, are very harmful to your credit report.