Bad credit history credit cards are offered by card issuers and lenders who are looking to take a bigger risk for bigger gains. Since the cards are offered to customers with low creditworthiness the terms are severe. Bad credit history credit cards are notorious for their hidden charges, high fees and exorbitant interest rates that the card holders should be careful about. Here are some of the features on offer for a bad credit history credit card that could benefit you.
Departmental store or gas station credit cards
These cards report credit to each of the 3 bureaus and hence they could become the last resort to rebuild credit history especially if no reputable credit card issuer is approving cards for you. However, the fees on the cards could add to your debt and any outstanding debt would meet with excessive interest. It is important not to make new expenses on these cards as long as you don’t pay off the old. It is also important to keep the outstanding balance at less than 20% of the credit limit at all times.
Some bad credit history credit cards offer credit tracking facility which will allow you to constantly monitor your credit score and ensure that it is growing in the right direction. Not only will it motivate card holders with bad credit, it will also immediately show the effect of positive spending and payment habits on the credit score. There are other tools too like minimum monthly payment limits and calculators which will help you figure out the timelines by which you will be free of debt.
Refundable security deposits
Bad credit history credit cards also come with the option of refundable security deposits. The biggest advantage of such a deposit is that it lowers the risk for the card issuer and therefore allows you to get more favorable terms like lower interest rate and a higher credit limit to the tune of $3000. Having a credit limit could allow you improve your credit score, especially if you have the discipline to keep your outstanding balance low at all times. Moreover, consistent payments on time will qualify you for future increases in the credit line without actually adding to the security deposit, which is a step in the positive direction.
In order to attract credit card customers some card issuers waive off excess fees such as application fees, processing fees, annual fees etc. which offers a great relief and saving in excess of $100 in some cases for the card holders.
Tools to manage finances
Bad credit history credit cards could help you repay your debt and build your credit score
. The tools include email messages and alerts that will constantly remind you of upcoming payment dates and minimum monthly payments. Besides, you can contact 24 X 7, customer service to understand more about the repayment plans and how you can get rid of the debt at the earliest. Lowering your debt by talking to experienced customer service representatives will help you build credit scores over a period of time.