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Sub Prime Credit Card
A sub prime card was designed for those with a low credit score. It was created to give people a second chance with their credit history.
Used responsibly these cards will create a positive payment history and improve your ratio of available credit to debt. Frequently these cards are used to repair a damaged score.
These two factors are very important when your score is being calculated. If these two factors are good then you can create a good credit score even with negative items on your credit report.
These cards do report monthly to all three major bureaus. Your APR will by approximately 19% and you will have some fees. Unfortunately this is the cost of your prior mistakes with credit, however this can be the last time you have to pay extra for your damaged credit.
Your credit limit will be approximately $300 and you will be eligible for periodic credit limit increases. However some cards like the Tribute Gold MasterCard do offer a card with a limit of $70 for those with very bad credit.
A sub prime credit card is superior to a secured card when it comes to credit reporting. With a secured card it will report to the bureaus as a secured account and will not help as much as an unsecured account.
You should still try to remove derogatory items from your credit report. However you should know that once a derogatory item ages for four years then it will have much less weight on your score.
To get the most benefit from your card on your credit we suggest you keep the balance at roughly 20%. This will show the bureau that you do in fact use your credit and that you are using it responsibly.
You can still get approval for a sub prime card even with; charge offs, collections, judgments, and even a bankruptcy. However each card has different approval requirements. Many of them will give you an instant decision upon submission of your application.
In sum we do suggest a sub prime credit card for individuals with a damaged credit history. It can be used to help you build positive credit and rebuild your score.
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