Sub Prime Credit Card
Sub prime credit cards have been created specifically for individuals with a damaged credit history. For most these cards offer a second chance with credit.
They can be used to improve a low credit score. This is because it can create a positive payment history and improve your ratio of available credit to debt.
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 will report to the major credit bureaus. They will come with an APR around 19% and will have an annual fee. However the benefit of improving your score will offset the high price of a low credit score.
Most of these cards come with a $300 credit limit. However some cards such as the Tribute MasterCard will also approve individuals for a $70 credit limit and many will offer periodic limit increases.
These cards will help to improve your score more than a secured card. This is because secured cards are reported as a secured account to the bureaus and this will be weighted less than an unsecured account.
It is still important to remove negative marks from your credit history. However it has been learned that after a negative mark ages for four years it has much less impact on your score.
For you to get the most out of your card you should strive to keep the monthly balance at 25% of your credit limit. This is because it shows the bureaus that you are using your card responsibly and that you do in fact use your card.
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 card for those looking for a second chance with credit. With proper use it can rebuild a low credit score.
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