How Guaranteed Approval Credit Cards Can Help Bad Credit Borrowers

Rebuilding your credit isn't easy.  Since you have bad credit, you are limited in the type of credit cards you can apply for. That's why many bad credit borrowers are turning to guaranteed approval credit cards. The main reason being, they are GUARANTEED APPROVAL!


There are generally 2 types of guaranteed approval credit cards.  Secured credit cards and merchandise catalog cards. 


Why are they guaranteed approval?  Well with the secured credit card the bank has your security deposit as collateral.  Your security deposit is usually the same amount as your credit limit. So the bigger the deposit, the larger your limit. Some secured credit card companies will let you add to your initial deposit so you can increase your credit limit, BUT NOT ALL DO.  You need to do your research and see if that is possible with the card you choose.


Secured credit cards tend to have lower fees and interest rates than unsecured bad credit credit cards.  Since the bank feels safe with allowing you to use the credit line.  If you stop paying they just take it out of your security deposit.  So the risk is rather small and that allows them to offer good interest rates. I’ve seen some as low as 9%!  That better than some good credit unsecured credit cards!


Secured credit cards are the credit card of choice of many credit repair specialist.  Not only do most of the report to all 3 credit bureaus but with on time payments, many convert to an unsecured credit card with a year.  Then their clients get that security deposit back!  How wonderful will you feel after a year of hard work on repairing your credit that not only did you increase your credit score but you now have a nice lump sum to re-deposit into your savings account!


Merchandise cards can offer guaranteed approval because you can only purchase merchandise out of their catalog. They tend to give you very large credit limits.  I've seen some that offer you a $7000 limit!  Some catalog companies don’t even credit check their customers!


When choosing a card, read the fine print.  Does your guaranteed approval card pay interest to YOU on your deposit?  Does it charge a monthly fee to report to the credit bureaus?  Does it report to all 3 bureaus? 


The key to using guaranteed approval cards is they MUST report to the credit bureaus!  If they don't then your on time payments are not being recorded and they are NOT HELPING TO IMPROVE YOUR CREDIT SCORE!


Where can you find guaranteed approval cards?  A quick search online will show you hundreds of sites offering these sort of cards.  Sites like not only offer these type of credit cards, but they also have reviews available online so you can research your card of choice further.



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