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Bonsai Finance: Getting a Credit Card for Bad Credit

It can be tempting just accepting whatever terms and conditions a credit card issuer provides if you have a poor or a bad credit. While people with a poor or bad credit might be limited to get financial help from traditional sources like banks, there are other alternatives you can choose from such as credit cards for bad credit. By using a credit card properly and paying your due on time, it is possible to help rebuild your credit history without having to pay significant amount of credit card fees. It is best to work with a credit card company that reports good payment behaviors to the credit bureaus to help in building your credit and establishing a healthy financial behavior.

The best option for a credit card for those people with a bad credit are secured credit cards because prepaid debit cards cannot help rebuild credit. A secured credit card will require a cash deposit, working like a regular credit card, wherein you can borrow money, pay on time, and assured that good payment behaviors are reported to credit bureaus to help rebuild your credit history. Beware of credit card issuers taking advantage of those with a poor or bad credit by charging them with huge amount of fees. When it comes to the most common fees on credit cards for poor credit, they include an annual fee, balance transfer fee, and late fees. There are credit cards without an annual fee, but usually those that charge this fee is charged around $30, and any amount more than this is considered a red flag. When transferring a balance from one credit card to another, the balance transfer fee should only be 3% to 5% of the transferred amount. For individuals with a good credit, balance transfer fees are usually not charged. When it comes to late fees, this can take a hit, but the maximum late fee is $27 for the first offense, and $38 for the succeeding for missing a due date.

It is worth it choosing a credit card offering tools to help you in monitoring your credit using debt-payment calculators or free financial education programs for improving your overall financial health. What are the important things you can do for your credit card to help you? It is best to find a secured credit card that can help you graduate to an unsecured card as long as you do good in your payment performance for at least a year. Even if your older accounts can help with your credit score, it is not worth it paying an annual fee, so it best to find an unsecured credit card without annual fee. For people with a bad credit, they usually want to eliminate plastic cards, but this is the fastest way to help rebuild a credit, so this is your best option if you have a bad credit.

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