Harder to Find Credit Cards for Bad Credit
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by: barrywaters
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Word Count: 526
In an economy that has many consumers seeking credit cards for bad credit, banks are tightening their lending standards. The Target Corp recently put out its earnings for the last quarter. In addition to suffering from sluggish retail activity, its earnings were hit hard by a $135 million loss it has to reserve to cover its rising delinquent credit card accounts. Adopting stricter lending requirements is one of the goals for the company to help it stay afloat. That means that fewer consumers will qualify for a Target credit card. The retail giant has even said that they are shifting their attention back to giving customers what they need in their stores. The company will likely not approve an account for those seeking credit cards for bad credit. Other lending institutions and banks are joining the movement in tighter standards, as well. They have applied higher interest rates and fees, lowered allowed limits and closed accounts, because of so many delinquent accounts. American Express recently took the restrictions a step further. The company announced a deal for its most delinquent account holders to close their accounts. It offered to pay those customers $300 to pay outstanding balances and close their accounts by the end of April. Those seeking credit cards for bad credit need not apply to American Express right now.
Not everyone has made the best financial choices and, consequently, will have to shop for credit cards for bad credit. The best way for people to establish credit and have a credit score is by having credit cards in good standing. You need a credit history to get credit. Those trying to improve their credit histories struggle to do so, because more credit is needed to do it. Consumers who are shopping for credit cards for bad credit will find that offers available to them come with extremely high APR rates. Many exceed 35 percent. With such a high rate, a consumer who already has a less than perfect credit history can often fall into more debt and make his credit worse. A prepaid credit card is one of the best solutions for those looking for credit cards for bad credit. A prepaid card has none of the pitfalls of a traditional credit card. It does not tempt a consumer into buying things he cannot afford. And it will not let a consumer easily fall into debt. And a prepaid credit card does not need verification of credit score or credit report, since the consumer pays the balance first. For those who want to use a credit card instead of carrying cash or a checkbook but are not eligible for a low rate account, a prepaid card may be just the ticket. They also help those who have previously had credit card debt establish some responsible credit card spending habits. The downside to some prepaid credit cards is that they may charge a fee or do not report to credit agencies. More Reading Secured credit cards . Student credit cards . Credit card applications . Student credit cards .
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