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Get The Facts On Bad Credit Unsecured Credit Cards

Not everyone is going to be classified as one of the well-qualified buyers who have the opportunity to buy a new car at zero interest and exceptionally low monthly payments. For various reasons, many people have a mark or two on their credit reports that, unfairly or not, can brand them a bad risk, increasing the cost of practically everything they hope to charge. A few companies are willing to provide people with bad credit unsecured credit cards that carry rates and charges different from the well-qualified folks.

For those applying for bad credit unsecured credit cards there are a few points to ponder before agreeing to accept the card company’s terms, agreeing to pay many different fees and potential charges that may be slapped onto the credit card bill through no fault of their own. Three charges are typically added to the card’s balance before it even arrives at the home, in addition to some fees that have to be paid before the card is approved.

Processing Fee: This charge can run as high as 50 percent of the opening credit limit, meaning that a person with bad credit unsecured credit cards with an opening limit of $300 will be paying about $150 processing fee.

Annual Fee: Most bad credit unsecured credit cards carry an annual fee, typically about $100 and in many cases it is charged as a lump sum. With just the processing fee and annual fee, that card with a $300 limit, arrives with a balance due of $250.

Monthly Fee: Add another $5 to $10 monthly activity fee to the first month’s balance and although the bad credit unsecured credit cards have a $300 initial credit limit, the available credit is going to be around $40 or $50.

Paying The Price To Re-Establish Credit

While many of those with a less than perfect score grouse about the fees, calling them excessive or punitive, they will accept them as part of the cost of re-establishing their credit. Cleaning up a credit history legally can take years and can be expensive. Despite the advertisements by companies to be able to clear the history of any bad marks, paying off all past-due bills and paying all current obligations on time is the only legal way of getting back in the good graces of credit providers.

Other options to obtaining bad credit unsecured credit cards include prepaid credit cards, but they may also have fees attached that reduce the amount of available pre-paid money available. Some banks require opening of a savings account with them before they issue the card and the limit is often only about half of the amount in the account. In addition, a monthly service fee is usually charged, as well as an issuance fee to have the name put on the card and has it mailed to the consumer.

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