Credit cards are almost a mandatory thing to have in the modern world of business and shopping. With cash transactions in large amounts almost going defunct and Internet shopping becoming more and more mainstream by the day, lack of a credit card can set prove to be a major handicap. Although the numbers of banks and financial organisations providing credit cards have grown by leaps and bounds in the past decade, a bad credit history is still a major roadblock in the path of securing or renewing your current credit card membership. It is here that guaranteed approval credit cards come into the frame giving the affected a much needed chance to either repay old debts or redeem himself by improving his credit score.
Guaranteed approval credits cards also known as bad credit credit cards are similar to most run of the mill cards out there in the market but are made with an eye to minimise company loses. Guaranteed approval credit cards are an excellent way to get the same functionality of a decent credit card and also build up credit history to become eligible for a better credit card in the future. Usually interest rates for these cards are much higher ranging around 19% and thereabouts and you also have to pay a reasonable higher yearly membership fee of about $125. The fact that these cards can be availed regardless of your past credit history is the basic reason behind these high rates. Despite these limitations, guaranteed approval credit card are a boon for those affected with bad credit history and are often seen as stepping stones on the road to regaining your ex-card or applying for a new card once over again. These cards also have much lower limits of about $5000- $10000 and usually place a spending limit of $100 on the first purchase.
Financial companies providing these bad credit credit cards usually keep tabs on the performances of their customers and this is where one gets a chance to redeem himself. The total repayment history of guaranteed approval credit cards is circulated to major financial bureaus that keep tabs of millions of credit history before reporting it to major credit card companies. While one can use these cards as a full-fledged credit card albeit with higher interest rates, timely repayment will ensure that you can rebuild your credit and be eligible for the other mainstream credit cards. There are two different variations of these high interest credit cards out in the market i.e. the unsecured and secured types.
Unsecured guaranteed approval credit cards offered by many major financial organisations and do not require the user to make a deposit in the bank. While this may sound good in the beginning, unsecured cards often come with higher upfront charges to the tune of $250-$350 and need usually prove to be much more expensive in the long run
On the other hand, secured credit cards require the individual to pay money upfront and open up a savings bank account before availing the card. While this may a long haul in the beginning, it is a much better alternative to unsecured cards as the upfront fee is much lower. In most cases, a minimum balance must be kept in the bank to sustain the functionality of these cards. However, with more and more companies offering secured bad credit credit cards, this requirement is waived upon proper maintained of account balance and repayment of credit dues over a period of time.
The first thing that must be kept in mind after availing a guaranteed approval credit card is that these cards are primarily to be used to build up a better credit record. Since tabs on repayment and spending sprees are kept by major financial bureaus, it makes sense to spend sensibly and repay back the minimum payment due well before the deadline. As the interest rates for these cards are much higher, delay in payment could damage instead of improving your credit records in most of the cases. Besides, as most financial companies seek out credit records from financial bureaus before granting approval for a new card, a good credit history will go a long way in restoring back your credit record and making you eligible for more competitive cards in the market.
So, if you are currently down with a rather unsavory credit record, guaranteed approval credit cards are the best way to stitch back your credit history and restore financial normalcy once again.
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