Many people end up in bad damaged credit score due to late payments, missed payments, bankruptcy, or overspent expense. The impact will be mostly some rejections for loans, getting difficult to gain security clearance, or even getting trouble to rent an apartment. Fortunately, all those bad impacts of bad credit score can be avoided through some ways and one of them is second chance credit card with no security deposit.
Generally, there are two types of second chance credit card. They are secured and non-secured card. What is meant by secured and non-secured is whether the credit card requires a total of money as security deposit or not. Therefore, second chance credit card with no security deposit belongs to non-secured ones. Most of secured credit cards demand $250 as security deposit to open an account. The total money functions as collateral in case the account owners are late or fail paying balances.
Non-Secured Credit Cards Overview with Bad Credit Score
As its name, non-secured credit cards do not require security deposit to open an account, but it does means it is more beneficial than secured ones. This type of credit card usually has higher APR compared to secured cards. Besides, it also requires annual fee and even extra fees associated with account. Make sure you aware of any fees that you need to pay before opening non-secured credit card account.
Another disadvantage of non-secured ones is that this type does not have as many as secured credit cards products. With more limited choices, you need to consider the qualifications that will not add any hard inquiries to credit report. Moreover, make sure your chosen credit card will report to credit bureaus, so the credit score can be rebuilt.
Moreover, second chance credit card with no security deposit could be really your second chance to remedy bad scores if you could show the improvement in finance. On-time payment is an improvement, so never miss a payment or have a late payment. Credit report will note that. By checking credit report routinely, you could see factors that influence your report and score. This will help in setting up strategy to maintain the balance and spending.
For your information, non-secured credit cards mostly cover a low credit limit. This could be an advantage since it will limit user’s spending. With low spending and punctual balances payment, bad credit will gradually turn out to be good credit. Surely it takes time, but nothing is better than good credit score. One more thing to be remembered is that non-secured ones have high interest rates. Adding more balances could really end you up in dark massive bankruptcy.
Now, it is clear of how second chance credit card with no security deposit will improve severe bad credit score. Remember that your main goal is to make the score getting better, so don’t get lured by taking more balances. By considering some important points explained before, now you can start to choose non-secured credit card and remedy your score.