Horrible Credit Unsecured Credit Cards

Popular Horrible Credit Unsecured Credit Cards

There are many reasons why anyone's credit can go down the tubes. Some are good reasons, such as an illness or the sudden loss of employment, but one of the main reasons people find themselves with horrible credit, is living beyond their means. Put simply, they are spending more than they can afford.

Having a credit card does not mean you are living beyond your means; everyone should have at least one credit card for emergencies and unexpected expenses. Here is a list of the most popular horrible credit unsecured credit cards and their associated fees.

Fees, Fees and More Fees

Every unsecured credit card for those with bad credit is going to come with a lot of hefty fees. These fees dramatically reduce your available credit. Also, since the fees are charged to your card, you have to pay interest on those amounts. Here are the breakdowns, the dollar amount you will pay in interest and the total dollar amount of interest paid when making only the minimum monthly payment:

What the Numbers Mean

At first glance, some of the numbers above look pretty extreme, unreal even. All the numbers were run through the calculator web credit card calculator twice. There is one caveat: all the numbers were based on making only the minimum monthly payment. The lesson here is to always pay more than your minimum monthly payment, even if it is only $5.

To break the numbers down even further, consider the payback percentages when making only the minimum monthly payment:

Final Tips

It is very important to really comprehend all the numbers listed above. The more you understand how interest works, the more likely you will be to use your credit wisely. Here are a few final tips to help you battle the horrible credit pattern:

• Consider getting a secured credit card first – Once you have had a secured card and used it responsibly, after one year you should qualify for an unsecured card with lower fees.
• Pay off the first bill in full – This bill will have all of your initial charges. When you pay them of in full during the grace period (around one month) you will not incur interest charges.
• Do not use the credit card until the fees are paid in full – If you can't make the full payment during the first month, do not use your new credit card. That means, don't carry it in your wallet and don't put it in your desk drawer next to your computer. Lock it in your safe, put it in your freezer, your sock drawer or anywhere is fine as long as it is out of view.
• Keep your credit balance at less than 50% of your available credit – Having a credit balance that is over 50% of your available balance actually hurts your credit score.
• Stay on track – When you already have horrible credit, high fees are something you will have to deal with. Once you have a year or two of on time payments, try applying for a mainstream, unsecured credit card. The interest will be higher than someone with good credit, but the fees will be significantly less or, in many cases, there will be none.