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Bonsai Finance: Getting a Credit Card for Bad Credit

If you have a poor or a bad credit, it can be tempting just merely accepting whatever terms a credit card issuer offers. While people with a poor or bad credit might be limited to get financial help from traditional sources like banks, there are other alternatives you can choose from such as credit cards for bad credit. It is possible to help rebuild your credit history with the help of a credit card as you pay on time without having to pay exorbitant credit card fees. Just imagine getting approved for a credit card, responsibly using it, and paying your dues on time, but in the end you just realize that all your good efforts are not being reported to the credit bureaus, thus working with a credit card company reporting to credit bureaus such as TransUnion, Experian, and Equifax is important.

Secured credit cards can help rebuild your credit unlike prepaid debit cards, so these are the most preferred option. A good secured credit card requires a cash deposit but it works like a regular credit card, wherein you can borrow money and you are assured that your good payment behaviors are being reported to the credit bureaus to help rebuild your credit score. Beware of credit card issuers who gouge people with a poor or bad credit with excessive fees. When it comes to the most common fees on credit cards for poor credit, they include an annual fee, balance transfer fee, and late fees. While there are credit cards without annual fee, the maximum acceptable amount is $30, and consider a red flag more than this amount. For balance transfer fee, it should only be around 3% to 5% of the transferred amount to transfer a balance from one credit card to another. For individuals with a good credit, balance transfer fees are usually not charged. When it comes to late fees, this can take a hit, but the maximum late fee is $27 for the first offense, and $38 for the succeeding for missing a due date.

It is worth it choosing a credit card offering tools to help you in monitoring your credit using debt-payment calculators or free financial education programs for improving your overall financial health. What are the good credit card management strategies you can do to your advantage? If you do well with a secured credit card, a credit card issuer may evaluate your account and switch you to an unsecured card after a year. Paying an annual fee is just used to keep an older card open but it is not worth it, even if your older accounts can help with your credit score. For people with a bad credit, they usually want to eliminate plastic cards, but this is the fastest way to help rebuild a credit, so this is your best option if you have a bad credit.

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