These credit cards have been designed to give you a second chance with your credit. It is for those with a low or damaged credit score.
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.
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.
These cards will help your score more that a secured credit card. This is because a secured card is reported to the bureaus as a secured account and will not impact your score as much as an unsecured account.
It is still wise to remove negative items from your report. However it has been discovered that once a negative item ages four years it will have much less impact on your score.
You should know that to get the most out of your card on your credit you should try to keep the balance at roughly 20% of your available credit. This will help because it shows the bureaus that you do use your card and are using it responsibly.
If you have; collections, charge offs, judgments, bankruptcy, or a repossession you can still be approved for this card. Each card will have different requirements for approval and you will get an immediate decision when you apply.
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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