These days, it is possible for anyone to book plane tickets and hotel reservations online successfully using a credit card. However, having a lack of credit or bad score is likely to give the person a tough time to get hold of a fresh credit card. There are many financial institutions which do offer an unsecured credit card for bad credit. They have been designed for those who are said to be in tight situations. However, such cards do come with higher rates of interest and some additional fees. However, people having poor credit are provided with an opportunity to have their credit score improved manifolds.
Availing secured cards
When applying for a credit card, it is wise for the individual to go for secured types. Such card types are excellent ones to enhance credit history. A security deposit is required of an amount ranging around $100 to $500. In such cards, this amount is an absolute must for making any new purchase with the card. The upper limit is clearly defined by the security deposit. If the person faces issues about having to pay the bills, then all the obligations are covered by the security deposit. This way, debt is termed to be secured.
Instead of acting like a real credit line, the secured card does assist the holder to rebuild his history, since all activities concerning his credit are likely to get reported to all three major bureaus in the country. There are also present other types of benefits on having such type of cards, which are as follows:
- On the deposit, interest amount of up to 4.5% may be paid.
- Visa or MasterCard logo present on the card is preferred by almost every merchant.
- Few issuers might provide double amount deposits as a limit.
- When the ability to manage the monthly bill is proved, the card limit could be increased, while some reduction in additional charges noticed.
Availing unsecured credit card for bad credit
This is another option available for those with suffering from the poor credit line. Security deposit is not required by such card type. Moreover, the rate of interest and limit is dependent upon the applicant’s history. Unsecured cards are generally not provided to those having no or poor history. Such cards can be approved by the provider instantly on applying over the web. Security deposit of any amount is not required for availing such cards. But the holder is likely to be charged with higher rates of interests and additional fees.
If the person has acquired bad credit or no credit, then he should first try to avail unsecured credit cards. In case, there is approval of the application; the person can avoid having to shelve out a good amount of money as a security deposit. But he has to have ‘true’ credit line to avail the same. In case, the unsecured card is denied, then a secured type of card can be the next option to choose. It is termed to be the best option available to rectify the past mistakes and to improve the credit score.