Boost Your Chance of Approval
With A Bad Credit Credit Card

Want to know exactly what one of these cards can do for you? Here's my short story. I filed chapter 7 bankruptcy in 2005. It was the hardest thing I've ever done in my entire life. After being discharged from the bankruptcy in March of 2006, I applied for an unsecured credit card a month later. I got approved! What credit card issuer approved me? Read my opinion of the best credit card after bankruptcy .

The first type of bad credit credit card is a secured credit card. A secured card requires a deposit to be made by you prior to the account being opened. The deposit amount usually determines your total credit line. This money sits in a certificate of deposit during the first 12 to 18 months. At the end of the period, if your account qualifies to be unsecured, you'll receive the money back plus interest. Otherwise, you will have the option to close the account or continue earning interest with the money still in the Certificate of Deposit. Read more in depth details about secured credit cards.

The second type is an unsecured credit card. An unsecured card does not require a deposit; it's like a typical credit card. An unsecured credit card may provide you with a smaller credit limit when compared to a secured credit card. Also, it may have a higher annual fee and annual percentage rate. It all depends on the credit card issuer, the terms of the account, and of course your current credit situation. Learn more about unsecured credit cards.

A poor credit credit card has several advantages. First, the approval guidelines for these cards are less stringent than typical credit cards. The credit line may be much smaller, but they are easier to get. Also, a smaller credit line can of course be an advantage. The smaller your credit line, the less chance that you have to overspend. Another advantage that just applies to a secured credit card is the interest you earn. It won't buy you a car or anything but maybe a tank of gas. :-) Plus, a secured card offers you some protection. If you fall into a situation where you can't pay, the certificate of deposit backs you up.

There are many disadvantages to acquiring a bad credit credit card. The first disadvantage is annual fees. A majority of credit cards made for people with poor credit charge an annual fee. It may be as high as $150.00! Secondly, it's doubtful that you will be offered a promotional rate when you sign up. You won't even get any balance transfer credit card offers. These are great perks you'll miss out on. Bad credit credit cards usually have an above average annual percentage rate. Finally, most of these cards do not offer any reward programs. Don't expect to get cash back or airline miles. With all these disadvantages it's understandable that you might not want to get one of these cards. Just remember that they are a great tool to use to help reestablish your credit.

Remember, if you're trying to improve your credit as I have, make sure to pay off your bad credit credit card in full each month. It not only saves you finance charges, but also shows other creditors that you can handle your credit card payments. They will come flocking to you with new credit card offers in the near future.