Second chance credit cards are designed for those who have had bad credit in the past. While they do not usually qualify as good credit, there are benefits that come with them. Here are some of the advantages of second chance credit cards.
Like any other credit cards, your second chance credit cards require a deposit. The amount of this deposit is different for every second chance credit cards available. When you apply for one, the credit company will ask for a specific amount of money. If you have poor credit scores, they will usually require at least $500. These cards also usually have a longer grace period to settle your debt so you do not have to face huge penalty fees.
To qualify for second chance credit cards , you need to have a good credit score. You can improve your score through paying off any outstanding debt, paying down any accumulated debt and having a good repayment record with your current card issuer. When you apply, it is important to ensure that you inform them that you are working towards rebuilding your credit score. They will give you an application form with the necessary information to check your credit score.
Unlike secured credit cards, second Chance cards do not require a security deposit. This means that you do not need to put up property or assets as collateral in case you fail to repay the debt. This may sound appealing to those who have been turned down for secured cards but they will not find much incentive to apply for unsecured second chance credit cards. The amount of the security deposit will depend on the issuing company.
To get approved for second chance credit cards, you will need to make timely payments. It is important to pay on time because failure to do so will result in a higher interest rate. Your payment history and late payments will also affect your score. The more timely you are with your payments, the better the chances are of getting approved. Once you prove that you are financially responsible, you will then be given a higher credit limit and will have the option of getting unsecured cards.
It is important that you only apply for second chance credit cards as a last resort after you have tried and failed to pay all of your other creditors. Do not get caught up in the temptation of using your credit cards to rebuild credit history. If you take out another secured card, you can help rebuild credit history by making timely and responsible repayments. This will go along way in helping you reestablish your credibility.
If you have applied for a second chance credit card and you are still not approved, it may be because your application was denied for reasons that are valid under the terms and conditions of the particular program. Most often, when people apply for subprime type cards, they are automatically rejected due to their bad credit history. The reason for this is due to the fact that they already have a poor credit rating. If your application is denied, then it is likely that you are looking for other options, such as applying for a normal or a subprime card.
Having an average score can negatively impact your chances of getting approved for unsecured cards. For this reason, it is important that you consistently improve your scores in order to keep your overall credit score in good levels. It may take some time to achieve this goal, but once you have done this, you will find that your chance of getting approved for a card or a loan will drastically improve. In order to improve your score, you should always try to pay your bills on time and try to avoid making any late payments at all.