Credit cards for bad credit are a special type of card that lenders make available to consumers who have a sub standard credit rating. Two types of bad credit products exist. The one type is a secured card, and the other type is an unsecured card. The secured cards do not require the debtor to have a high credit score. Instead, the lender determines the person’s credit line by the amount of money that he or she offers as a security deposit. Generally, if the consumer makes timely payments for a period of one year, the lender will release the security deposit funds and transition the customer to unsecured status.
The unsecured credit cards for bad credit are products that have lower minimum criteria than the standard credit cards. In other words, someone who has had a history of poor payments, bankruptcy or repossession may be able to obtain one of these cards. Usually, the lender will assign a new customer a credit line of approximately $300 and monitor his or her payment history with the card. If the cardholder makes timely, faithful payments for a period of six months to one year, the lender will usually grant that person a credit line increase.
Applying for credit cards for bad credit is easy. The applicant can either call a toll free number to apply or complete an online application. The online application will ask the applicant for information on his or her employment and housing status. The person will also have to submit identifying information such as name, address, social security number, and birth date. The lender will use this information to verify the person and determine eligibility and credit line. Some credit card providers return instant decisions to their applicants. Other providers require more time to decide on the outcome. Either way, a person with bad credit now has a greater opportunity to obtain a card.