Have a Poor Credit? Here is Why Guaranteed Approval Credit Cards are a Perfect Choice For You
Nowadays, your financial health depends on good credit. If you have a poor credit, then getting yourself a credit card or a loan with financial institution can be difficult. It may not seem like there are many options available to fix your credit, but with a guaranteed approval credit card, you get the opportunity to achieve a better credit score.
Now, getting a new credit card to fix your credit card may seem a little bit confusing. Won’t this lower your credit score further? You wonder. Well, there is some bit of truth in that, but the good news is that guaranteed approval credit cards come with more restrictions that are pretty easy to follow and can help you get back into good books fast.
In this article, we explore some of the reasons why guaranteed approval credit cards for people with bad credit are an ideal choice. If you need card recommendation, please see 5 Guaranteed Approval Credit Cards to Help People Rebuild Credit.
Who is a Guaranteed Approval Credit Card for?
Also known as credit builder cards, guaranteed approval credit cards are credit cards that are specifically designed for people with poor credit. These cards can help you repair your credit rating that might have been damaged by things like skipped or late payments, a declaration of bankruptcy, county court judgments, divorce, and or any credit-damaging event. A guaranteed approval credit card basically offers you guaranteed approval and a chance to rebuild your credit. In just a short time, you will enjoy the benefits of using credit card as well.
Guaranteed approval credit cards are also an excellent option if you happen to be an immigrant or a temporary Canadian resident, and have no credit history. Once you obtain the card, you can start building your credit.
How Do Guaranteed Approval Credit Cards Work?
As an applicant with a poor credit, you are guaranteed credit card approval and therefore won’t have to go through the length credit-check process. Before obtaining the credit card, the lender requires you to deposit a fixed amount into a special account. This deposit acts as a guarantee that the lender will have means of repaying the given amount.
One of the main features benefits of guaranteed approval credit cards is that certain restrictions are put in place to prevent you from overspending, and to develop better financial management skills.
Applying for a guaranteed approval credit card is simple, fast, and convenient. You can easily apply online or at the comfort of your phone and get approved in a short time.
If you’re considering applying for a guaranteed approval credit card, it’s important to know that some cards offer lower credit limits, comes with a higher interest rate, as well as additional fees. But this is common with most credit cards, so this shouldn’t discourage you from obtaining one.
You should also know that there is no set amount for the security deposit. The amount may depend on how bad or good your credit is. The credit card provider may request a security deposit ranging from $50-$500.
NB: Your guaranteed credit card issuer may offer you additional credit without asking for another security or collateral if you demonstrate good payment habits.
How Can You Rebuild Your Credit Score with a Guaranteed Approval Credit Card?
After obtaining a guaranteed approval credit card, there are a number of ways in which you can quickly rebuild your credit score. They include:
• Making timely repayments: Like other credit card payments, if you demonstrate good repayment habits, you will get to improve your credit score fast. Furthermore, you wouldn’t want to spoil your credit once more. A guaranteed credit card gives you the perfect opportunity to rebuild your credit
• Keep the card balance below the given credit card amount limit: Maxing out your guaranteed approval credit card can have a huge negative impact on your credit card utilization ratio. Be sure to keep the balance on the card below the given amount limit
• Make small, frequent purchases: In addition to making timely repayments on your credit card, making small, frequent purchases is a guaranteed way to rebuild your credit score fast.
Using a guaranteed approval credit card is one of the best and quickest ways to establish and rebuild your credit. They also offer great convenience to people looking to raise their credit score and achieve a better financial security. So if credit card issuers have been shunning you because of your poor credit, a guaranteed approval credit will save you a great deal.