It used to be that getting a bad credit credit card meant paying ridiculous interest rates and high annual fees. Nowadays, that's just not the case. There are many bad credit credit cards on the market that have low interest rates and reasonable fees. It's just a matter of knowing what to look for and what you should expect. 1. Understand What Type of Bad Credit Credit Card You Qualify For Before applying for a bad credit credit card, you need to understand the differences between them. There are two main types of bad credit credit cards on the market -- secured and unsecured. A secured bad credit credit card will have more lenient credit qualifications than an unsecured one. Most unsecured bad credit credit cards require that you don't have any late payments or delinquent accounts for a period of six months before you can qualify. If your credit problems have been more recent, you're going to want to look into secured cards rather than the unsecured variety. 2. Review The Interest Rates When it comes to carrying a bad credit credit card, you should expect to pay a higher interest rate than you would if you had good credit. After all, the lender is assuming a bit of a risk by extending credit to you. They are compensated for this in the form of a higher interest rate. That being said, it is important to understand that even if you do have bad credit, a bad credit credit card should not hang you out to dry in terms of the interest rate charged. Some bad credit credit cards charge as little as 9.99 percent while others try to charge interest in excess of 20 percent. I personally would never advise paying more than 16 percent interest on a bad credit credit card -- preferably less. Even if your credit is horrible, a secured card is guaranteed by your security deposit. Because of this, your interest rate should be lower than it would had you qualified for an unsecured credit card. 3. Watch Those Fees Some of the companies that offer a bad credit credit card will extend an unsecured line of credit with a reasonable interest rate, but will charge ridiculously high fees. Because of this, it's very important to understand all of the costs associated with any bad credit credit card. Some credit card companies will charge application fees and processing fees in addition to an annual fee and a monthly maintenance fee. This is all on top of the interest you will pay if you don't pay your balances off in full each month. When looking for a bad credit credit card, never apply for one that charges an application fee. Processing fees are acceptable, as long as they are kept under $70 and are not charged in addition to an annual fee. If an annual fee is charged, make sure monthly maintenance fees are not. 4. Read The Fine Print While it's not common, every once in a while you will run into a bad credit credit card that doesn't have the best interests of the consumer in mind. Make sure you read the fine print and the entire terms and conditions of any credit card you apply for. While it can be time consuming, it's definitely worth it if you want to avoid any unpleasant surprises. 5. Use It Like a Loaded Weapon It sounds drastic, I know. However, if you're in need of a bad credit credit card, then something bad happened to your credit that got you here in the first place. If you want to avoid future mistakes, you need to be very careful with how you use the card. While looking for the right bad credit credit card can be time consuming and even frustrating to a degree, knowing exactly what you should expect and the key things to look for will make it much easier. Keep the above tips in mind and finding the right bad credit credit card can be much easier than you may think.
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