Consumers with limited or damaged credit histories have limited options for
obtaining unsecured credit cards with competitive rates and features. For
those with no credit, credit cards in the subprime niche come with high fees,
high interest rates and few of the rewards benefits many consumers seek.
In the midst of a gargantuan credit crunch, many financial lives are governed by
Equifax, Call Credit and Experian. For high-risk debtors with sullied credit
reports, gaining approval for a credit card with attractive terms has always
been challenging. But these days, even those with high credit rankings and
top-notch earnings are frequently rejected by lenders. Only 50% of consumers
currently qualify for advertised deals with reasonable interest rates. In
response to economic instability, lenders are targeting risk by narrowing
lending criteria. Borrowers with empty credit reports are perceived as high risk
clients, while those without equity, assets and more than two existing accounts
have suddenly found themselves outside the boundaries that separate profitable
debtors from risky ones. In this environment, obtaining favorable credit cards
for people with no credit has become a challenge.
Credit cards come with bells and whistles that few consumers can function
without. Safe online spending has become a priority for a consumer base that no
longer relies on brick and mortar stores. The security offered by accounts is
not confined to the ability to gain instant credit. In a world dominated by
fraud, the protection offered by certain credit cards has become a crucial part
of securing assets. Through purchase protection, some cardholders are refunded
for items that are stolen within three months of purchase. Loyalty schemes
attached to such accounts are a bane for cash-poor consumers seeking new
budgeting strategies. Of higher priority is the need to build upon a poor credit
score or create a new one through responsible use of credit.
Typically, clients with muddy credit reports have access to the bottom feeders
of the credit world. These are cards with lofty interest rates, poor terms and
little actual credit value. The traditional high interest store account is the
frequent solution of high-risk consumers, offering limited spending range and
rates of up to 29%. There are more practical solutions that involve the use of
credit to rebuild your score and gain financial stability.
Sub-prime credit cards trap many unwary clients through upfront fees high enough
to absorb the majority of their credit limits. Legally, interest rates may not
exceed 25%, but less reputable lenders escape this limitation by charging hefty
upfront fees. Sub-prime products can drown undisciplined clients in an
ever-increasing debt cycle, but for those who take control of their repayments,
a clean slate can be created. Those who keep their spending negligible and repay
the maximum on time every month soon find themselves with an established history
as a low risk debtor. Sub-prime products are not ideal for those who need a
large amount of credit instantly. They are best reserved for responsible
consumers who are willing to slowly sculpt their credit reports back into shape
so that they can face their financial futures afresh.
Secured credit cards are a practical option for those with equity. Security
deposits are placed against the credit limits during the first year of use.
Clients who repay in a timely manner during this period are often rewarded with
unsecured credit cards. Even small amounts of security can help lay a foundation
for an improved credit report. As little as $300 can be placed into unsecured
credit cards, allowing you to give your financial record a facelift that will
positively reinforce further lending potential in the future. The deposit
offered allows creditors to obtain loans to the value of between 50% and 100% of
their deposits. Secured credit cards need to be handled with absolute restraint,
since defaulting leads to the loss of the initial deposit. Products that offer
high interest rates on deposits come with the additional benefit of accruing
extra capital on savings over time. To turn your secured card into a proactive
strategy to rebuild your credit score, the account needs to be reported to major credit bureaus.
We present her a selection of secured options from major issuers suitable for consumers
looking for credit cards for no credit:
Bad credit comes in tiers according to your precise credit score. Those with
severely deteriorated credit histories can request bankruptcy
advice about using credit cards tactically to rebuild their monetary
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