Bad Credit Credit Cards - Who Needs Them....

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Now what exactly are bad credit credit cards ? These are credit cards that had designed specifically for persons with either no credit history, or they have a bad credit rating.

Today's consumers are being sold the concept of credit - you buy now and pay later. As a result, very many consumers buy what they do not need. Many forget about the 'pay later' part of the deal, or they have so many things purchased on credit that they end up in problems when it comes to repaying the credit facilities that were extended to them. This problem might be more widespread than you think.

I know of quite a number of persons who have migrated to the United States. They would have absolutely no credit records whatsoever. Now is very difficult - not impossible - but very difficult to get by in our modern world, and more so in the United States without credit cards. You won't be able to rent a car or a hotel room, and very many merchants will not accept a personal cheque without a credit card. Now such persons as those who migrated to the United States, college and university students who have very little or no credit history, or persons who did not do too well at managing their credit history, should apply for credit cards that cater for this.

There are three basic types of bad credit credit cards . These are:

1. Prepaid - Very similar to the standard debit card. You open an account and place a deposit in it. This deposit will become your card limit. With this type, you are not extended credit by the bank since any purchases made come directly from your deposit. When you have exhausted this, you can no longer use the card until you make another deposit. This type of card can be likened to the training wheels on a bicycle, and are excellent in helping you to budget and to live within your means. The major downside of such a card however is that they cannot help you to rebuild your credit. This is because no credit is being extended to you, and as such, these accounts are not reported on by banks to the credit bureaus.

2. Secured Bad Credit Credit Cards - With this type of card, you will have to open some type of savings account and deposit a sum of cash in it. This will be held as collateral by the bank that issued the credit card to you, and for as long as you have the credit card, you will not have access to those funds. You can deposit more to be held as collateral for the card as you go along. Now the amount deposited will normally represent the credit limit on the card. It can be a little more. If you default in the payment on this card, the bank will deduct from your savings to pay it. The interest rates and charges on this card will normally be more that the typical credit card. This type of card should be reported on by the issuing bank. This is great card for learning money management and savings.

3. Unsecured Bad Credit Credit Cards - This will be similar to the normal credit card. The interest rates and fees may however be significantly higher than the current market rate. In some instances, you will be charged a fee upfront as the cost of extending the credit facility. This fee is separate from the annual fee. The credit limit that is extended to you on such a card will generally be low and depending on how well you manage it, the issuing bank may increase it as time goes by. This type of credit card should be reported on by the issuing to the various credit bureaus.

Bad credit credit cards are generally designed to help these persons build or repair the credit record. Most of them would generally incorporate some feature that will encourage the cardholder to save. Now because these cards are used as training wheels, it is very important that you ensure that they are reported on. You may not want to use this type of card for too long a period of time. So exercise your right to free credit reports and ensure that they are being accurately reported on.

Orchard Bank has a few bad credit credit cards that cater for the needs of persons with bad credit history. These include:

• Orchard Bank Platinum MasterCard®

• Orchard Bank Classic MasterCard®

• Orchard Bank Secured MasterCard®

This card allows you to establish or repair your credit. Anywhere you go, it guarantees acceptance and buying power. It will help you manage everyday finances – from unexpected expenses to opportunities you can’t pass up. Some of the benefits include:

• Monthly reports to all three credit bureaus - Helping you to create a strong credit history

• 24 hour online account access which allows you to keep on top of all transactions made with your card

• Use your Orchard Bank MasterCard card for online shopping knowing that you will not be responsible for unauthorized charges

• Periodic reviews of eligibility for credit limit increases

• Free online bill pay

Other recommended bad credit credit cards include:

• New Millennium Bank Platinum Visa® or MasterCard®

• Horizon Gold Credit Card

Some of the features of these cards include:

• Guaranteed approval

• The report to all the major credit bureaus

• High introductory savings rate.

It is important that you choose the right card that is most suited to your needs from the list of bad credit credit cards that is available. Repairing or establishing you credit rating is very important and this particular card selection may be the key. So choose wisely.