How To Get A Credit Card For Bad Credit
Sign in
  • BLOG
  • Editor's Picks
  • |
  • Technology
  • |
  • Entrepreneurship
  • |
  • Business
  • |
  • Finance
  • |
  • Career
  • |
  • New India
  • |
  • Entertainment
  • |
  • Others

    • How to Get a Credit Card for Bad Credit

    Sumit Singh

    software engineer
    The increasing popularity of credit cards in recent times has also meant a substantial increase in the number of credit card non performance asset or NPAs. A lot of active credit card users who have been active defaulters over a period of time have either found their credit limit reduced or credit card being cancelled. If you are one of those with a bad credit history due to credit card or any other financial defaults, opting for a new credit card is virtually impossible. Since all banks check the CIBIL score of each credit card applicant before accepting his or her credit card application, people with low credit ratings are considered high risk assets and hence not considered for credit cards.  All is however not lost as help may be at hand for such users in the form of secured credit cards.

    Understanding Secured Credit Cards: Secured credit cards as the name suggests are secured cards offered by banks against a collateral deposit. Secured credit cards are linked to an individual’s term deposit account usually offering a credit limit of up to 80 % of the overall term deposit amount. All public sector banks as well as private banks offer secured credit cards. Users with bad credit history or users who do not fulfill the minimum eligibility criteria of a normal credit card can easily avail a secured credit card without any waiting period.  On the downside however, an individual would need to open a term deposit account with a particular bank before applying for a secured credit card for that bank. 

    Advantages of Secured Credit Cards: Secured credit cards offer a win-win situation to both the customer as well as the credit card issuing bank. The bank on the one hand offers a secured credit card offering credit on an existing term deposit making, the card risk free for the bank. The secured credit card applicant on the other hand gains a multiple advantage.

    Firstly he or she can get a credit card irrespective of the bad credit rating or CIBIL score. Secondly a secured credit card if used wisely can go a long way in improving the bad credit score of the individual. Users usually keep applying with multiple banks for normal credit cards and keep getting rejected due to their poor credit history. Each new credit card application further reduces their credit score as it makes them appear as credit hungry. Rather than applying for a normal credit card, people with poor credit history are much better off using a secured credit card and slowly rebuild their credit history rating.

    How Secured Credit Cards Can Help Rebuild Credit Rating: Secured credit cards can go a long way in helping people improve their CIBIL score. Using their secured credit cards for small purchases and effective repayment can help increase their credit rating over a period of time. Make sure that all repayments for secured credit card are done without any default to effectively improve the overall credit rating. The individual however needs to make sure that the respective bank shares all repayment history with CIBIL in time for effective improvement in credit score.

     Visit www.bankbazaar.com/credit-card.html for more information about credit cards
    start_blog_img