Visa Cards For Bad Credit:
If you have a poor credit rating, it may not be a good idea for you to get even more credit. Plus, you will find that you it is hard to be approved for new credit as well. That said, financial emergencies happen, and having a credit card and making regular payments on it can help to improve your credit rating. There are lenders out there who offer Visa cards for bad credit people. They do this because they know they can make more money out of this, by charging higher interest rates in view of the higher risk they are exposed to. As such, everybody wins: you will have a source of funds during emergencies and possibly enhance your credit rating, while the card companies earn more money.
What Is Bad Credit?
If you default on any of your debts, or go over your credit limit, you will be reported to any or all of the three main credit bureaus. These bureaus use the information that they have received to calculate your credit score. That score is then used as a benchmark for companies who will decide whether or not to accept your application for credit. If your score is poor or below a certain level, you can apply for two types of Visa cards for bad credit: the secured one and the unsecured one. Just how bad your rating is will determine which one of the two you will be offered.
Unsecured Visa Cards for Bad Credit:
If your credit rating is only just within the range that would be classed as 'bad', then it is likely that you will be offered an unsecured card. These are exactly like regular Visas, but the interest rate is higher and you will usually have a lower credit limit. Essentially, you need to see these cards as useful for emergency financial situations, repaying existing debt, and rebuilding your credit rating. If you have one of these cards, use it, and pay off more than the minimum payment (but not the card in full), then your credit should start to get better.
Secured Visa Cards for Bad Credit:
If your credit rating is very poor, then you may be able to receive a secured card. This means that you have to put money on the card yourself first, usually between $300 and $1,000. If you then use the card, but you don't pay it back, the bank will have that $300 to $1,000 to take your payment out of. Secured cards have lower interest rates than unsecured ones because of the collateral.
As you can see, just because you have bad credit doesn't mean that you can't get new credit. An increasing number of financial institutions understand that you didn't choose to not pay your bills, but that you found yourself between a rock and a hard place and simply couldn't get out of it anymore. As such, they are often more than happy to give you another chance, albeit one chance only. However, if you default on one of these cards, your credit rating will drop significantly, and you will really struggle to get more credit in future.