So you have bad credit. Maybe you’ve defaulted on
loans, defaulted on credit cards, or you might have
judgements against you or your property. Let’s say
you’ve defaulted on every debt that you have? Can
you still get an unsecured credit card? Yes, you can! Let
me tell you how.
There used to be a time, that once you’ve filed for
bankruptcy, or defaulted on a credit card, that you were
blacklisted from ever owning an unsecured credit card
again. Nowadays however, there is a plethora of credit
card companies that offer unsecured credit cards to
individuals with bad credit, or individuals who have filed
for bankruptcy.
Many credit card companies that offer unsecured credit
cards to individuals with bad credit, usually start out by
initially offering applicants higher annual fees and lower
credit card limits. Just about every major credit card
company offers an unsecured credit card for individuals
with bad credit. If you pay the credit card payments on
time for several months or years, then the credit card
limits are usually raised periodically. As long as you
keep paying the payments on time, the credit card limits
are raised.
Some credit card companies buy up unpaid, or defaulted on,
credit card debt. This debt is also known as a
“non-performing” loan in the banking industry.
These credit card companies will then go back to the
original credit card holder, who defaulted, and offer them
an opportunity to repay the old credit card debt. Usually,
these credit card companies will offer the debtor an
incentive for repaying the debt. This incentive is in the
form of issuing the debtor a new unsecured credit card.
This new credit card will have a balance with the limit of
the old debt.
The debtor will have an opportunity to repay the old debt,
for little or no interest, and will accumulate a new active
credit limit for every periodic amount that is paid on the
old debt. For example: for every $100.00, that is paid on
the old debt, the debtor will receive a $25.00 credit limit
increase on the new unsecured credit card. The terms of
repayment are usually very strict, however, it is an
excellent way to redeem one’s credit. In this way,
an individual will erase an old debt in which they
defaulted on, and establish a new line of credit.
Another way to obtain a credit card when you have bad
credit, is to apply for a secured credit card. A secured
credit card is a credit card that you actually pay the
amount that you wish to charge in advance. The credit card
limit is dependent on how much money the card holder
actually pays into the account. These cards usually have
an annual or monthly maintenance fee. Although this
doesn’t sound very beneficial at first, the payments,
if made on time periodically, actually do establish a
history of responsibility, and believe it or not, establish
good credit, over long periods of time, if the credit card
company reports to the credit bureau.
Applying for unsecured credit cards is an excellent way for
individuals with bad credit to purchase items through the
normal credit card billing systems found at retail stores
and on the internet. These credit cards can also be used
at ATM’s and at cash advance terminals. The best
attribute about unsecured credit cards, is that it is
almost impossible to be turned down, because your bad
credit history is irrelevant.
The truth is, that if you have bad credit, it doesn’t
mean that you can’t obtain a major credit card.
----------------------------------------------------
Bryan Pringle, Ph.D., has written many articles on the
credit industry, and is the webmaster of websites offering
news and information regarding credit cards. For more
information, please visit:
http://www.apply-forcreditcards-online.com
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