About Credit Cards That Help Rebuild Credit
Rebuilding bad credit can be a difficult task, because it requires developing new, good credit. Many lenders are rightfully unwilling to make loans or issue credit cards to people with a bad credit history. However, since the 1990s, people with bad credit have had more options to get credit cards and start rebuilding their credit rating.
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Types
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There are two main types of credit cards for bad credit. Unsecured credit cards do not require a security deposit for the card line to be issued. Secured credit cards may have lower interest rates and annual fees, but typically require an upfront savings account deposit of at least $300 as security for the credit card. Popular banks for poor credit include Orchard Bank and First PREMIER Bank.
Considerations
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Getting a secured card for rebuilding credit requires saving some money upfront, but is a good way to get lower interest rates, lesser annual fees, and establish a savings account in the process.
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Misconceptions
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Some people believe having a high income can make up for no or bad credit when applying for a loan or credit card. However, this is not enough to override a poor credit rating in most cases.
Benefits
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Getting a Visa or MasterCard to help rebuild credit is an important step toward eventually getting the best loans for cars and houses.
Prevention/Solution
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To avoid getting more bad credit, always keep your card under the limit and make timely monthly payments.
Benefits
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There are several cards on the market specifically designed for people looking to rebuild poor credit. Orchard Bank, First PREMIER Bank, and Centennial Bank all offer unsecured MasterCard and Visa cards to people with low credit ratings, including those who have suffered from bankruptcy. The benefits of these cards are the companies have good reputations, do not charge excessive fees, and have a history of helping people rebuild their credit.
Warning
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There are a number of disreputable credit cards geared toward those who need to rebuild poor credit. Some of these charge hundreds of dollars in fees and even deduct money from the card holder's checking account without reason. Be extremely careful when dealing with an unknown credit card company, and always do research through the Internet before accepting any telephone or mail credit card offers.
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