In today’s tough financial environment, it is easy for people to commit financial mistakes. It could be a bad financial decision, a case of losing money, a bad habit or even a simple case of overspending. If a person is negligent and falters on his or her credit card or loan repayment, his credit ratings are hampered, thereby making it difficult for the person to accrue loans or credit cards in future.

However, all hope isn’t lost. There are credit cards available for people with a poor credit and they are known as Bad Credit Cards. Getting one of these can be tricky, but the approval requirements for the following cards are less severe. The options available for the same are secured credit cards, unsecured credit cards and pre-paid cards.

Unsecured Credit Cards

There are several organizations that will approve people with bad credit. However, as an applicant, you need to ensure that you’re aware of and are okay with the fees and other charges on this card. Since in such cases, the lender bears and increased amount of risk, the annual charges of such cards are higher than normal. The annual percentage rate for these cards is also high and is usually above 19.9%.

Secured Credit Cards

Unlike unsecured credit cards, companies offering secured credit cards require you to make an initial deposit. This deposit is then converted to a bond and the amount of this bond becomes your credit limit on the card. Everything else is the same; you get monthly bills for your purchases and spending and are to pay them within a stipulated timeframe.

Your deposit earns interest for the time you’ve held your card and is completely refundable should you close your card account on good terms.

In case you falter on your payments with this card, the money saved in the bond is utilized to pay off your debts.

Prepaid Cards

Prepaid cards, on the other hand are similar to a debit card. You are able to fund your card via your bank and use it like you would use any other card. It can be used at point of sale merchants, it can be used to pay bills, make payments and even at ATM Machines.

In further articles, we shall discuss each of these cards in details.