In the United States right now folks are using just over 600 million credit cards and this number appears to be on the rise, irrespective of the current economic downturn. The financial decline has yet performed a part in many individuals defaulting on the payments and thus, joining the increasing number of people who have poor credit. These people are trying to find credit cards and their need has been fulfilled by credit card organizations that are willing to provide them credit cards at high rates of interest.
The charge card companies stand to make a good profit by providing credit to individuals that have a poor credit rating by charging allocation fees and high Annual Percentage Rate (APR). The typical APR on a regular credit card is around 14 percent, whereas on credit cards without
deposit it can move up to 29 percent. On the average, more than 60 percent of Americans have credit card debt and a number of these are perfect prospects for credit cards for poor credit.
One of the reason folks prefer for credit cards would be to enhance their credit rating. People take these high interest rate cards from businesses which statement to major credit bureaus. People then make the payments of these cards in time-to improve their credit scores. Typically a credit rating below 580 is considered bad, so folks choose for these credit cards and make timely payments to better their credit score. Once they have a great credit rating and have streamlined their funds they change to ordinary credit cards that have reduced interest rates.
No deposit credit card is not easy to come by, as the lender is at a higher risk of not recovering the cash because, of the credit background of the person borrowing, coupled with the truth that no deposit is needed to get such a card. You don't want a collateral or financial security with this sort of credit card, and just in case of insolvency or failure to reimburse the debt, the lender will need to write off the sum as irrecoverable bad debt.
There are a few financial organizations like First Premier, Aventium, Capital One, Orchard, who give credit cards to people with poor credit score. The rate of interest charged is variable and depends on various mitigating circumstances. The rate of interest counts on the income of the borrower and credit worthiness.
Some companies also choose customers who will select for a wage garnishment clause, which enables the creditor to withhold a certain sum from the borrowers wage. There is a legal process which has to be followed for such a process as well as your credit ratings might suffer due to the wage garnishment clause.
The credit limit provided on such type of cards is also low because of the economic risks involved from lenders point of view. Some companies will provide a credit limit ranging from $200 to $5,000, and most times there will also be a yearly fee related to these kind of credit cards.
Application process is fairly easy with several businesses actually offering 24 x 7 customer helpline numbers. You only must fill a simple online application to use for that card, there might become a processing fee ranging from $5 to $50, depending upon your credit worthiness.
Before selecting a financial institution for obtaining credit cards, check their APR and additional annual fees. If you already have a poor credit history, it's best to carefully consider your current fiscal situation before planning for a high interest credit card.
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