If you have been denied a credit or charge card in the past, you may qualify for a second chance credit card. These second chance credit cards are available to people with bad credit histories as well as those with good credit. However, there are several eligibility requirements that must be met in order to be eligible for a second chance credit card. Applying online is a great way to apply for a second chance credit card, and many companies have online applications that you can complete and submit for approval.
A second chance credit card requires that you make regular payments on time to maintain your account. You also need to deposit some sort of collateral, whether it is money, your home, jewelry, or other valuable item. Most second chance credit card issuers will require you to put down money before even providing you a second chance credit card. This type of security measure prevents fraud, which is one of the leading causes of bankruptcy in the US.
If you qualify for a second chance credit card, the next step is to go out and find the right second chance credit card issuer. These first-time applicants will need to get through a credit application with the company they choose. After being approved, they will have to set up new credit by having three credit bureaus send you statements. The next step is to pay off any debts that you have and keep all payments current or soon will be delinquent. You need to remember that a secured card is simply a way to rebuild your credit score. Once you pay off old debts and make all payments on time, your score will go up.
When applying for a second chance credit card, make sure that you read all of the terms and conditions. Each offer may have different rules and restrictions. Check each one carefully before signing on the dotted line. You need to know exactly what you are getting yourself into before you sign. Also, make sure that you are working with a reputable company who will not sell your personal finances to another company.
When you work with a reputable second chance credit card issuer, you can expect to receive perks such as cash back or points. Some issuers will also give incentives for using your new card regularly. Incentives are nice but remember that they do not pay off any outstanding debt so if you do not pay off all of your debt you will not receive any of the incentive money. Points are also very nice. You will earn some point each time you make on-time payments. However, make sure that you do not exceed the number of points allotted for the period that you will be carrying a balance.
One last thing to keep in mind when searching for a second chance credit card issuer is to make sure that they offer an excellent money management habit. A good issuer will reward you over time based on how well you use your card. They want to make sure that you are responsible so it is in their best interest to reward this behavior. Make sure that you always know where your money is going and that you are learning good money management habits so that in the future you will not be in debt again.