Many consumers today possess bad credit history. This can be attributed to the most recent financial crisis which left many individuals jobless and with huge credit obligations to settle.
Still, many individuals today desire to regain their credibility as cardholders and credit consumers. So they look for ways by which they can rebuild their credit reputation. They try applying for different credit card accounts, loans and other credit programs so that they can re-establish their credit profiles.
But can consumers use credit cards with instant approval to rebuild their credit history? And what other card programs are available to people with less than perfect credit scores? The answers to these questions will be discussed in the succeeding paragraphs of this short article.
Who Are Qualified to Receive Instant Approval Credit Cards?
One of the most important requirements of instant approval credit card programs is the credit report of the card applicant. Credit card personnel use this document to evaluate whether it will grant a consumer the credit card he/she needs or not. Most of the time, those who possess a minimum credit rating of 680 to 700 get approved to use credit cards with instant approval.
But what about those whose credit ratings are way below the minimum score of 680? Can they still be granted instant approval credit cards? The answer to this is a resounding yes. After all there are card companies today that cater to the needs of consumers who have poor credit ratings. What these card issuers do is to provide guaranteed approval credit cards that carry relatively higher interest rates and fees. This way they can compensate for the huge risk involved in allowing individuals with bad credit history use their credit cards.
Now, suppose you do not like to make huge payments on interest and credit card fees. Are there other card programs that you can use to regain your credit reputation? Let us find out.
Credit Card Options for Consumers with Poor Credit
Aside from guaranteed approval credit cards, consumers who posses bad credit can also be granted other credit card programs. For example, they can approach card companies and apply for secured credit cards or for prepaid debit cards. What are the usual characteristics of these card programs?
Secured credit cards and prepaid debit cards both require consumers to provide an initial deposit. However, the purpose of such initial cash-out varies from one card to the other. For example, the deposit in secured credit card programs serves two purposes. First it serves as collateral for the use of the card. Should a cardholder fail to keep up with his credit charges, the card company can use the initial deposit to settle all the unpaid credit obligations. The initial deposit also serves as the credit limit of the secured credit card. A borrower cannot go beyond this limit or else his future transactions will be declined and he will be penalized with declined transaction fees.
Meanwhile the initial deposit required in prepaid debit card programs serve as the fund that the consumer can use on his prepaid card. After all, he/she will not be provided with credit lines that he/she can depend on in making purchases or in paying his/her monthly bills.
We hope that this article helped you recognize card programs that you can use to achieve your goal of rebuilding your credit reputation.