Credit Cards For Bad Credit that entice you with offers of rewards, incentives, and no deposit requirements aren't always as ideal as they appear. Knowing more about these three card features can save you from applying for the wrong credit card.
Credit Cards For Bad Credit - 3 Features the Banks Don't Want You to Know
When it comes to understanding the terms and conditions of all the credit cards for bad credit, the process can be challenging. Choices tend to be limited and the interest rate and fees are higher. Add to the confusing mix all the enticing offers of free rewards and perks and you have a real dilemma deciding which card to apply for.
You'll find the majority of applications will be for a secured card where your credit limit is determined by the amount of your security deposit. In this article, we'll study three little known features you should be aware of.
1) Bonuses and Perks
When you see a credit card for bad credit with attractive offers cash back, discounts on products and services, free air miles and other bonuses, sounds pretty good right? Not so fast. Do not be misled by all these fantastic bonuses. study carefully the terms and conditions of the application. If you have to pay higher interest and annual fees of another card just to get benefits, go to the next question card. The money you save over time will allow you to purchase airline tickets or bonuses.
2) Deposit Requirements
When researching card applications, you'll notice the deposit requirements will vary from bank to bank. Some credit cards for bad credit require as little as a few hundred dollars to as much as a few thousand dollars. Your limit is typically between 50% to 120% of your deposit amount. If you come across a card that advertises no security deposit, beware! Many banks who waive this deposit make up their profits by charging you hefty application fees, processing fees, and monthly maintenance fees. If a secured card advertises a no deposit feature, study its disclosure of terms and conditions carefully to be see how it compares to other cards requiring a deposit.
3) Conversion Feature
This unadvertised feature allows you the option to convert the status of your card from secured to unsecured after you establish a history of timely payments. Banks who offer this option like to see a positive payment history of at least 6-12 months before considering the option of converting the card to an unsecured status.
If you qualify for this conversion, you'll save a lot of money as a result of the lower interest rate and fees. Just make sure the terms and conditions are comparable to other unsecured cards. It if isn't, shop for another card.
Your choices of credit cards for bad credit may be limited, but with diligent searching, you can find a secured card with reasonable terms. As you establish a positive payment history over time, you'll be able to qualify for low interest unsecured cards.
Bobby Tan is a debt management consultant helping people resolve their bad credit issues. Find Bobby's reviews of the hottest credit cards for bad credit at Bad Credit Card Tips web blog.
Get Bobby's free 33 Days To Near Perfect Credit course. Click - http://www.badcreditcardtips.com.
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