These Credit Cards Usually Offer Introductory Rates Of Around An APR Of 19%

Category: Finance, Credit.

Individuals who find themselves in credit trouble often bring this about through spending on unsecured loans. Spending this" free" money often spirals out of control as individuals do not have anything on which to curb their habits.

These loans include credit cards and medical bills, advancements of money without anything put down to secure the debt. The result is overextension to the point where they must seek help in order to repair their credit, which results in a bad credit score. Many credit card companies now offer credit cards that can be used by individuals even with bad credit. To make matters worse, individuals with a bad credit history will find that they have trouble getting any credit in the future on unsecured loans, and without this access many can expect their standard of living to come down. Secured credit cards, as they are sometimes called, give people with bad credit a chance to once again use a credit card and the opportunity to repair their credit on their own. In order to be approved for this loan, individuals must first open up an approved loan account with a financial institution designated by the credit card company.

Unlike other credit cards, these types of cards usually operate on a secured loan basis. This loan will be on a fixed amount, anywhere from$ 300 to$ 5000 and upwards. It is vital to recognize that in the case of a default, the collateral may be put up for auction. In order to secure the loan, individuals will be asked to put up collateral against any default of payments to the institution. Often this will be the cardholder s house or other property. Because of the secured nature of the credit card through the loan, an individual holding a secured credit card is able to determine his or her own credit limit.

In itself, this often provides enough incentive for people with a bad spending history to get back some self- control. This limit is set according to the amount of the loan that is taken out. As is customary with secured credit cards, they make monthly reports to the three credit bureaus of the United States. Holders of this type of card can also take advantage of programs which can help with credit repair. These bureaus are the companies in charge of assessing the credit ratings of individuals from all over the country through access to certain financial information. These credit cards usually offer introductory rates of around an APR of 19% .

With this information, they also compile credit scores and keep up to date with financial habits in order to help an individual s credit score to go back to a positive number. Users of these cards can also expect to pay a fee annually and are comparatively low due to the secured nature of the card. Online services usually include an easy to use application form, access to accounts and account management 24 hours a day, and answers to a number of frequently asked questions. Finally, holders of secured credit cards have access to the Internet options available through the issuing bank.

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