Bad Credit Visa Card - How This Industry Has Dramatically Changed And What Your Choices Are

Published: 13th January 2012
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The first thing you need to know when searching for a bad credit Visa card is that this marketplace has changed more in the past four years than it has in its earlier 60 years. It started with the mortgage crisis and has only recently began to see some normalcy. Another huge blow to this industry was the new credit legislation that Congress passed.

Unfortunately these new laws have eliminated all unsecured offers for a bad credit rating. If you want an unsecured or traditional card in which you are extended money or credit simply on the promise that you will pay it back. To be approved for these today you are going to need at least fair credit typically around a 650 FICO score.

If you're under that score you have a few options to choose from: partially secured, secured, prepaid, and catalog card offers. First, let's review the two types of cards you want to avoid like the plague.

The catalog card is not a credit card. It is only going to be accepted at one location either online or through a catalog for merchandise available there. These cards are complete ripoffs and even if used responsibly will very minimally improve your credit if at all.

A partially secured card is beginning to become a valid replacement for unsecured cards. We have seen a few of these cards recently come to the market and they seem to have worked around the legal framework that prevented them earlier.

Unfortunately these offers are much worse deals for you than ever. We sincerely wish this was just a cause of corporate greed but we can't help but see the direct correlation with the government intervention and new regulation and the results being much worse offers.

These cards will have an initial credit limit of $300 but you first must make a $95 security deposit which partially secures the account. We believe this is the crucial step and what the lawyers have found to step around all the new government regulation.

In addition you are going to have to pay $75 annual fee, charged up front. You also will have to pay an $8 monthly maintenance fee and we realize how unbelievable this sounds but you will be charged a 49.99% APR interest rate!

This interest rate is stomach churning and there are additional fees that even the worst unsecured cards before didn't have. Please do not get these cards, because they are partially secured they will have only a slightly larger influence than a secured card but a much higher cost.

Secured credit cards and prepaid debit cards have grown in popularity like wildfire. A prepaid card will provide you with access to a checking account by giving you free direct deposit and online bill pay. This will help you to avoid paying check-cashing fees and buying money orders.

Secured cards will come as a Visa or MasterCard and will work just like an unsecured offer. You're going to pay roughly 10% APR and you may have a $50 annual fee. It will report to all three credit bureaus and just by paying your bill on time you'll be able to start creating a trail of positive payment history.

The big difference with these is you must first secure your card by making a deposit with the bank. This deposit is fully refundable and FDIC insured provided you do not default on your monthly payments.


For more about a bad credit visa card or a secured credit card visit us.

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