Secured or Unsecured Credit Cards for Bad Credit

If you're looking for new credit cards for bad credit, there are many major banks and credit card companies that will offer credit cards for those with bad credit or poor credit due to no credit. Surprisingly enough, people with no credit often have the same difficulties obtaining new credit cards or loans as those with bad credit from a poor credit history.

Your credit history is very important because it is used for many reasons. Whereas at one time your credit report was only retrieved if you applied for a loan or for a new credit card, today many businesses require a copy of your credit history for any transactions that involve monthly payments. Some of these companies include record clubs, book clubs, satellite and cable companies, utility companies and agencies offering homes for rent. If your credit appears to be bad due to poor payment history or having no credit, you may be denied many services or accounts.
If you're trying to improve or build up your credit and get new credit scores, there are credit cards, both secured (prepaid credit cards) and unsecured, that you may be available to you. Secured credit cards are also referred to as prepaid cards and work in much the same way as prepaid phone cards. When you apply and are approved for these new prepaid credit cards, you make a deposit similar to a savings account in their bank. The deposit is held as security for your credit card, which is why they're also called secured credit cards.
The amount of the deposit you make becomes the amount of your credit limit. Some secured credit cards offer you a credit limit of up to $10,000, if you are willing and able to deposit that much. Prepaid credit cards are usually used by individuals trying to improve their bad credit. For an individual that has the cash flow but poor credit, prepaid or secured credit cards are opportunities for them to pay off other credit cards and have just one new credit card with one monthly payment. Making your payments on time may make it possible to get credit limits and unsecured new credit cards.
Unsecured credit cards are credit cards that do not require a deposit. If you have poor credit, your interest rate will probably be slightly higher than with secured credit cards. Even with an unsecured new credit card, you can work towards improving your poor credit by making your payments on time.
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