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Sometimes life lands you in a situation that
causes your credit to suffer. A job loss or
illness can send your credit rating south leaving
you with nothing to do about it. Some creditors
may let you slide a month or two, but your records
will still show a delinquency. A stolen identity
can also leave you feeling violated and unable to
resume a normal life with credit. It is during
these times you may have to search a little harder
to find companies that wan to deal with people who
have bad credit. There are a handful of lenders
who will help you re-establish your
creditworthiness by using one of their credit
cards.
The price you will pay
Searching the Internet will give you a good idea
of what types of credit card companies will deal
with bad credit. Companies like Capital One,
Orchard Bank, Providian Financial and even
Citibank have plans to help you get back on your
feet again. But at what price will you have to
pay? The price is interest. Interest rates from
these companies can be up to 25-30% annually. So
it is important to manage your money and credit
more wisely.
One of the many benefits of using one of these
preferred lenders is that they report positively
to the major credit scoring repositories. That
means if you make timely payment it will be in
your favor and will help boost your credit rating
back up. The interest you pay is a small price to
pay to get back on your credit worthy feet.
The secured credit card route
Most of the major banks and lending institutions
may seek a deposit matching mechanism called a
secured credit deposit before backing a credit
card for you. This card is used the same way that
a normal credit card is, however the cardholder
must fund it before using. If the cardholder
deposits $100 into the interest bearing account
their credit card is funded at 100% of their
deposit. Some credit cards can at their disposal
issue double or triple matches to boost the amount
the creditor can spend. The deposit of $100 can
return $300 in credit terms. Secured credit cards
also report positively to the credit agencies and
will eventually become normal revolving accounts
and the balances held for deposit are credited
back to the cardholder’s account. A very
positive way for people with bad credit to obtain
the financial vehicles they need. |
