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Credit Cards for Bad or No Credit
Compare Credit Cards for People with Bad or No Credit

Unsecured credit cards are an option for individuals suffering from bad credit. Credit cards are unsecured, most of the time, which means an asset (as opposed to a car or home loan) does not back the credit card. If you have bad credit, several approval methods are available. This is dependent on the state of your bad credit. Read on to learn how to find unsecured credit cards with bad credit.

Check your credit report for free. Sometimes bad credit is worse because of old, outdated information, missing or incorrect information on your credit report or even identity theft. Find out if you may have this problem by getting a free copy of your credit history to check for errors lowering the credit score.

Find unsecured credit card offers online, specifically for individuals with less than perfect credit. Many applications state eligibility for the credit as being for "Bad Credit," "Needs Improvement" or "Poor Credit." Compare those lines of credit as well as those rated as "Good" if your credit score is boarding.

Make any loan or credit card payments on time. Car loans, home mortgages, personal loans, student loans and credit cards should be paid on time before applying for new credit. Lenders look more favorably on people that have bad credit if they are current and make payments on time.

Compare unsecured credit cards for interest rates. You can find offers online for credit even if you have bad credit. Compare the interest rates on these cards to find out which is the lowest.

Do read the terms and fine print. Many of these credit cards have higher interest rates because of your increased risk, but you should also know about the membership fees, annual fees or processing fees that may also apply.

Use a secured credit card to help you build up your credit. Secured credit cards require a deposit to be made to establish your credit limit. Choose those credit lines reporting to the credit bureaus and low fees. Then use it wisely by making timely payments every month.

Questions to ask:

How often does the card get reviewed for credit line increases? Some card issuers automatically review your card on a regular basis to determine whether you are eligible for a credit line increase. It is to your advantage to choose a card that helps you build your credit line faster. Be sure to check if there is a fee associated with credit line increases.

Does the account feature an automatic payment plan? Some credit issuers require you to enroll in an automatic payment plan in which the monthly payment gets deducted from your checking account each month. Unless you keep careful track of these automatic deductions, you could end up with bounced checks and NSF charges. You would also face charges from the credit issuer if there are insufficient funds in your bank account when the automatic withdrawal is made. You need to do an honest assessment of your earnings and spending patterns to see if you have the financial means and discipline to work with a plan like this.

As with everything in life, there are plusses and minuses associated with unsecured credit cards. Remember that these cards serve you best if your goal is to rebuild a strong credit history. Use the card to your advantage by turning it into a tool for increasing your financial discipline. Always pay on time, and as much as possible, stick to small purchases, so you can pay off the card in full every month.

Prepaid Credit Cards

Prepaid cards function just like credit cards in nearly all aspects, but you have to pay the spending limit up front. It's like a prepaid phone card you can use to buy anything.

The most obvious benefit is that you can't go over your limit. The most obvious down-side is that most prepaid cards require a start-up or activation fee. In general though, they are still excellent cards for those of us that need the convenience of a card - yet still have that pesky 'less than perfect credit'.

Some current examples of prepaid cards are the READYdebit® Card, All-Access® Visa® Prepaid Card, Bank Freedom Prepaid MasterCard®, Baby Phat Visa® RushCard™ Prepaid Card, BuyRIGHT Prepaid MasterCard®, Eufora Preferred Credit Builder Prepaid MasterCard®, Wired Plastic Prepaid Visa® Card.

Pros:

* Typically don't require credit or employment check to apply
* Allows for online shopping (and possibly online bill paying)
* Allows for use of most ATM machines
* Possible reports to the major credit bureaus
* Pre-set limit keeps you from going over the limit
* Peace of mind when traveling, etc. that you have a card as opposed to carrying cash

Cons:

* Possible high start-up/activation fee
* Possible high monthly/annual fees
* Possible nickel and dime you to death with additional fees

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