Questions About Poor Credit Credit Cards

Here are the answers to some of the most commonly asked questions about poor credit credit cards.

What are poor credit credit cards?

A poor credit credit card is a card that affords people with below-average credit the convenience of a credit card. These cards are very easy to qualify for and offer many different options.

Why do I need a poor credit credit card?

If you do not have a credit card, you might find yourself pretty limited in the things you can do. Booking a hotel room, renting a car, and making purchases online are all examples of things that you usually have to have a credit card to do. Aside from the convenience, poor credit credit cards also give you the opportunity to rebuild your credit. Many creditors report the standing of your poor credit credit card account to the credit bureaus, so you can potentially improve your credit score.

Which poor credit credit card is right for me?

There are three basic options for poor credit credit cards. The first is a prepaid card, which is little more than a glorified debit card. You deposit funds into your account, and your spending limit is then determined by this amount. There is no actual extension of credit, so this card will usually not be reported to credit bureaus. The second is a secured credit card, which is secured against collateral in the form of funds in a savings account. You deposit the amount you desire into a savings account, and this amount then determines your credit line. Some lenders might give you more credit than the amount in your savings account. These cards are sometimes reported to credit bureaus. The last type of card is an unsecured credit card. The credit lines on these cards start out small and periodically increase based on your ability to keep the account in good standing. Unsecured cards for people with poor credit usually come with higher interest rates and fees than normal cards.

Will I have to use poor credit credit cards forever?

The beauty of poor credit credit cards is that you can use them as a step, or a rung, as you climb back up the credit ladder. If you start out with poor credit credit cards, you will begin to build your credit back up to the point where you can progress to cards with more attractive terms. You will also find that, as you use your credit responsibly and pay on-time, the terms of your current poor credit credit card will improve. For instance, your creditor might issue you credit limit increases periodically.