Real Estate

Doing Financing The Right Way

Bonsai Finance: Getting a Credit Card for Bad Credit

It can be tempting just accepting whatever terms and conditions a credit card issuer provides if you have a poor or a bad credit. 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. With the help of a credit card, you can establish a good credit history by paying on time without having to pay exorbitant credit card fees. It is best to work with a credit card company that reports good payment behaviors to the credit bureaus to help in building your credit and establishing a healthy financial behavior.

Secured credit cards are preferred that prepaid debit cards for individuals who want to rebuild their credit. A secured credit card needs a cash deposit but it works like a regular credit card, wherein you can borrow money and pay it back on time, while you are assured that your good payment behaviors are being reported to the credit bureaus. There are credit card issuers taking advantage of people with poor or bad credit by charging them with excessive fees. The annual fee, balance transfer fee, and late fees are the most common fees on credit cards for poor credit. The acceptable annual fee for credit cards for bad credit is $30, and you need to consider it a red flag for any amount more than this. When transferring a balance from one credit card to another, the balance transfer fee should only be 3% to 5% of the transferred amount. Balance transfer fee is not usually charged for people with good credit. 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.

In order to help in the improvement of your overall financial health, it pays off choosing a credit card offering tools to help you in monitoring your credit with the help of debt-payment calculators or free financial education programs. What are the best credit card management strategies that can help you financially? It is best to find a secured credit card that can help you graduate to an unsecured card as long as you do good in your payment performance for at least 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. The fastest way to help rebuild your credit is through using a credit card so this is your best option if you have a bad credit.

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