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Finding a credit card with bad credit history is not that easy. However, prepaid
or debit cards can be acquired relatively easily. But as the credit card helps
re-builds credit history, what are the things to look in a prepaid or debit
card so that it suits best for a person with bad credit history? Here are 3
important points.
1. Should have guaranteed approval
There is no use of having a debit card that repeats the routine procedure of
employment verification, credit checks, limited or restricted approvals. Get
a debit card with minimum hassles, it is normally written on the debit card
offers, whether it does credit verification and other procedures or not. If
not explicitly mentioned simply avoid the debit card altogether and find another
one that suits your needs.
2. Does it report to credit bureaus
You are taking a debit card because no other credit card company approved you,
or if they approved the rates were so high that you couldn't afford it. But
you still want to improve your credit history. This can only be done if the
debit card you want reports to the major credit bureau, because that's the only
way one can have his spending habits and debit card use benefit his credit history.
If the debit card doesn't do it, it can be good for regular debit card uses
but won't help you much in rebuilding our credit history. Be very particular
about it.
3. No unreasonable fees
Your credit card bill was inflated because of numerous fees and penalties,
if this thing continue with your debit card, it's time to think over it. Many
debit card companies charge various fees like the Annual Fees , Monthly fees,
Customer Service fees, Activation Fees, Fees per purchase, ATM Cash withdrawal
fees and Inactivity fees etc. These fees increase the cost of debit card ownership.
Excessive fees is what every bad credit person should avoid and if the prepaid
card makes a big hole in your pocket with its fees, it's better to find another
one.
Debit or prepaid cards are good instruments to promote financial discipline
and keep a control over finances. Though easy to get they can be a great tool
for bad credit people.
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