Many banks and credit card companies offer simple credit cards designed to help people build or rebuild their credit with Credit cards for really bad credit. However, it is worth understanding all the pros and cons before diving into these unique financial instruments.
You can do without a credit card.
However, without a credit history or if you have a bad one, it is often challenging to get one. Secured and prepaid credit cards are designed to fill this gap. All you need to provide is your social security number and a minimum cash deposit to start funding your transactions.
These cards have considerations before making your choice.
Prepaid credit cards for bad credit offer the convenience of using a credit card when shopping online or booking planes, hotels, or cars. These credit cards, also known as stored value cards, basically work like debit cards with one big difference: they are not linked to a bank account. Most offer free direct deposit, so check cashing fees are a thing of the past. You don’t even need to have it anymore to cash your check.
Once you have loaded money onto your card, you can start using it to pay your bills. Some cards even offer free bill payment services, but you should check the card details you choose. Another significant benefit of prepaid cards is that they allow you to build slowly, repair your credit history as long as you make the minimum payments to all your creditors on time using your card, and keep your account balances below your credit limits.
You can then request that your account information be reported monthly to credit bureaus. Sometimes this is also a free benefit. Check the terms of your card. Most prepaid credit cards have many obscure and confusing fees, so read the terms and conditions carefully before applying for a prepaid card.
When applying, read the terms and conditions of each card and compare prices. The ability to quickly and easily buy terms online means you can often avoid most, if not all, of these fees that can add up. In addition, you will often find potential activation fees, direct deposit fees, bill payment fees, credit reporting fees, and even balance check-only fees.
To take advantage of them, you need to be comfortable receiving electronic statements and checking your balance online or through your mobile phone. However, most people are computers these days, so most people won’t see this as a problem.