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Credit Cards for Bad Credit |
This amount that you deposited will
now serve as the credit limit to your prepaid credit card. The bank
is safe from your purchases because they are not giving you any
kind of credit. The amount of each purchase you make is immediately
deducted or debited from the money you have deposited. When you
have already used all of the money that was used to fund your purchases
then you can no longer use your credit card, unless you replenish
your account with a fresh infusion of money. This type of credit
card does not have any monthly bills because you are not using the
banks money. You should be aware that these types of cards do not
help in rebuilding your credit because credit card companies do
not report this type of accounts to credit agencies.
Secured credit cards are type of credit card that is secured by
a collateral that comes in the form of funds that are deposited
in a savings account opened at the issuing bank. The collateral
serves as a condition in order to extend your credit. Secured credit
cards are almost the same as regular credit cards except for the
collateral policy. The total amount of money needed to make the
collateral varies with each program offered by different companies.
These types of credit cards may or may not be reported to credit
agencies so if you want to get this to improve your credit record,
check with the bank first if they will issue reports.
Unsecured bad-credit charge cards are practically the same as regular
credit cards, except for the fact that a higher interest rate as
well as other fees may be imposed on your purchases. The starting
credit limit is usually low but this will be increased periodically
if you can show that you can keep the account in good standing.
As with secured credit cards, some banks report the performance
of unsecured bad-credit credit cards while some don’t. Check
with the issuing bank if you also want to achieve the goal of improving
your credit record. |
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