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There are numerous bad credit card offers on the market today – there is no getting around it. Even if you have bad credit, you will continue to receive credit card offers in the mail, but before you accept a credit card offer, carefully consider what is actually being offered and whether or not it is worth it to you.
Secured Credit Cards
One of the most popular kinds of credit cards offers to individuals with poor credit is the secured credit card. While on the surface, this can seem like an attractive offer, the reality is that it is actually a very bad financial move.
Secured credit cards require that the applicant send in a deposit along with their application. Not only is this somewhat dubious – you do not know if the company will actually refund your deposit money if you are denied – but you have no guarantee that you will eventually be able to access your deposit if you prove to be a good credit risk by paying your monthly payments on time and for more than the minimum monthly payment. In many cases, the application fee is taken out of the deposit and the new cardholder is required to supplement the deposit before the card company will allow any charges to be put on it.
High Interest Credit Cards
Another type of credit card that is frequently offered to individuals with poor credit is an extremely high interest card. In some cases, interest rates on these cards can top over 30 percent and are increased each time the card holder is late for a payment.
It is important to understand that high interest credit card companies actually want people with poor credit to be late for payments because they can then charge those cardholders even higher interest rates. In many instances, even if you have mailed a payment in time for it to be received or even called in a payment by the due date, it may not be posted to your account in time for it to be considered on time and so your interest rate may be jacked up.
Cards Offering to Rebuild Credit
In many cases, credit card offers received in the mail that claim to help a person with bad credit rebuild their credit are not at all what they claim. This is particularly true if the credit limit being offered is extremely low. In one case, a company (First Premier Bank) offers a $250 limit VISA or MasterCard, but when the details are revealed it turns out the card is pre-charged with numerous charges that have to be paid before it can be used ($29 application fee, $119 acceptance fee, annual charge of $50, $6 participation fee).
Summary
If you have bad or poor credit, carefully review any credit card offers before sending in an application. In many cases, better offers can be found with reputable financial institutions that are much better deals for those with poor credit who are willing to work toward creating positive credit.
Have Bad Credit? Card Offers to Avoid
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