The term bad credit credit card is used to describe a form of card that the individual can obtain even if they have a poor credit rating. This type of card can actually help the person who has a poor credit history to improve it. So in reality these bad credit credit cards can act as a lifeline for people, as well as giving them a chance to learn how to control their spending. These cards are also known as secured credit cards.
The bad credit credit card asks that the person start an account with the credit card supplier and that they keep some sort of balance in the account. This is basically because they don't trust somebody with a bad credit record, which is fair enough. These companies are in business to make a profit and this profit could be threatened if they don't take precautions. The credit limit put on the card is dependant on the amount of cash in the account and is usually between fifty and one hundred percent of the cash balance. This type of card can also be called a debit card as they function more as a debit card than the traditional credit card.
Nowadays as with everything else it seems, there is quite a choice of this type of card available but there are a few things to consider before choosing a bad credit credit card. Firstly, what are the fees/charges when you take out the card, and what is the rate of interest, if any, paid on any balance in your account. Secondly, what is the minimum amount you have to keep in the account and what is your credit limit in relation to your account balance. You should try and find a bad credit credit card that has little or no fees attached to it, only requires a small balance and gives a decent rate of interest on any balance.
For people that find themselves with a bad credit record, there is no doubt in my mind that bad credit or secured credit cards can only be a good thing in that they give these people the chance to repair their credit history. Don't forget to do plenty of research so you can land a good deal, the advent of the internet makes this fairly painless. I often wonder how we managed to search for this type of information before.
