Have a bad credit score? Need a way out of it? Look no further, second chance credit cards for bad credit are just what you need. These credit cards are there to help people with bad credit scores to get a chance to improve their credit records and get their financial lives back on track. Second chance credit cards benefit those people who cannot qualify for a normal credit card or a loan due to their bad credit history or bankruptcy.
Several banks offer second chance credit cards for bad credit scores. However, they have some limitations and clauses. These terms and conditions should be carefully studied and observed if you want to correct your mistakes. There are two types of second chance credits cards for bad credit: secured and unsecured credit cards.
The secured second chance credit cards are much more helpful and safer than the unsecured ones. They require a certain amount of money in your account to start with. It is like opening a new account; you have to deposit some money in it, like $200. This $200 will become your credit limit in this case, you can increase it whenever you want but this will be discussed later. Now that you are getting your credit card, you should also look at the interest rates. In these cases the typical interest rates are in the range of 11-22%, which is very high especially for a person in a bad financial position. But you do not need to worry about that as long as you intend to keep paying your monthly dues on time.
The secured second chance credit cards for bad credit holders is like taking small steps out of the hole. These cards do help improve credit scores, but very slowly. If you are a patient person you will realize that this is for your own good, it will help you show a positive record for a longer period of time even if it does not significantly change the ratings. If you are in a hurry to get out of the bad credit zone you can speed up the process by depositing a higher amount of money in your account. The high amount of deposit reflects a good financial situation to the credit bureau, hence your credit score will improve at a better rate. The higher the deposited amount, the faster your credit score will change.
Saying that, however, doesn’t mean that you will be off the hook in a month or two. You will have to show a consistent record of timely payments for at least six months to start turning the tables. Most banks and lends will be looking at a two year (at least) record before they give you a loan. Showing six months of good behavior would be a good start. The second chance credit cards for bad credit record holders offer a chance to redeem themselves financially.
When you have finally improved your credit score, you are not in need of the second chance credit cards for bad credit so you should close your account and withdraw the amount you deposited in the beginning. Another major advantage of the secured second chance credit cards is that if you fail to pay a monthly bill, your credit score won’t be affected. This way you can restart from the same position anytime you have the money.