If you wish to apply for a credit card but have suffered from bad or poor credit in the past then you need to look for secured credit cards for bad credit. A secured credit card differs from an unsecured or traditional credit card in that in order to be granted the card you must put down collateral. In most cases the collateral amount which can be $500, $1000 or more is kept in an interest-bearing account by the credit card company. The money is refunded to you once you have proven to the issuer that you are responsible with credit. You can then apply for and be accepted for an unsecured card that does not involve collateral.
A secured credit card service is provided through the Credit Repair Companies to meet with the needs and requirements. You can have complete details about it to repair the score. The application should be correct with the companies to have the desired results.
Before you apply for secured credit cards for bad credit you need to ask some pertinent questions of the credit card companies you are looking at. To begin with what costs are connected to the card? Just as unsecured credit cards have costs so do secured ones. Examples of the costs include application fees, annual fees and processing fees. Steer clear of cards that come with high fees. If you choose a card with high fees it can eat up a large percentage of your security deposit.
How much money are you required to deposit for the secured credit card? A secured credit card for bad credit is secured because money is required to start the account. You then borrow money from the money you put down as the security deposit. Most secured cards have minimum as well as maximum deposit limits. Find out ahead of time if this is the case. Also find out if the deposit from your secured credit card will be placed in an interest-bearing account. If it will be then find out how much interest your money is expected to earn.
Under what circumstances will your security deposit be used? This varies from one credit card issuer to another. Some use it only after a severe delinquency such as five to six months of no payments have past while others use it after one late payment or one month of no payment has occurred. Knowing under what circumstances your money will be used can help you to be as responsible and disciplined with your money as you can be.
Secured credit cards for bad credit are valuable for those who are working their way back from a troubled financial past. However like all other financial dealings you must be cautious.