Trying to get a credit card despite having bad credit
Unfortunately I no longer count myself among the lucky group that have a few credit cards sitting in their wallet.s Credit cards are a great resource if used properly. However, not everyone is able to manage their credit as well as others and for them, bad credit credit cards are the only option. Here’s what I’ve found:
A bad credit, credit card is essentially a secured loan. The person wanting the credit card has to supply a security deposit to the credit card company before the card is issued. This security deposit is equal to the credit line supplied. Let’s say you wanted a $500 credit limit on a credit card. If your credit is less than stellar, you’ll have to hand over $500 to the credit card company.
It seems almost fruitless to give away $500 if you need $500 worth of credit. Granted you could just use the cash to make your purchase, but you shouldn’t look at it that way. Instead think of it as that $500 buying you a better credit score. If you make your payments on time, don’t use all the credit every month and work hard to pay it off, you’ll be re-establishing your own credit.
Another type of credit card that many people don’t consider applying for is are small business credit cards. This is particularly true for people who run a small business out of their home. Instead of getting a credit card that is just for the business, they end up using their personal credit cards. Although this can seem like a good idea, it’s really not for several reasons.
Even though your business is home based, the expenses from it aren’t. Keeping the business finances separate from your personal finances is really important. Another benefit is that quite often small business credit cards are going to offer you a lower interest rate than the cards you are already carrying. You don’t need your accountant to tell you that means you’re going to save money, which every business owner, big or small wants to hear.