People with bad credit are often familiar with advertisements for secured credit cards with bad credit. You can get secured credit cards with bad credit scores and if you manage them wisely then you can improve your credit scores over time. You have probably seen the new prepaid credit cards. Some companies which supply prepaid credit cards with bad credit will report account activity to the major credit bureaus, but you will pay a fee for this service. They will only report your good credit activity for a period of one year and you must keep using the card and paying the fees for two years. You may be completely unfamiliar with unsecured credit cards for people with bad credit and you may think that they are a great idea, but there are many drawbacks.

Companies which offer unsecured credit cards for people with bad credit charge high fees. We looked at one that charges a $48 annual fee, a $29 account set-up fee, a $95 program fee, a monthly participation fee of $6 and if you want an additional card, you pay an additional $20. You may think that other unsecured credit cards for people with bad credit charge lower fees, but these are typical. These are not typical of the fees charged for good credit credit cards. With bad credit, you pay more and get less.

Companies which offer unsecured credit cards for people with bad credit assign low credit limits. The initial credit limit is typically around $250, depending on the company. Total fees are $178 or $198, if you want two cards. This means that you have $72 or $52 worth of available credit. You are paying $178 for $72 worth of credit and just for the privilege of carrying around this card. Companies that approve credit cards with bad credit scores believe that they can charge whatever they want. They believe that you are desperate for credit.

Companies which offer unsecured credit cards for people with bad credit charge high interest rates. The annual percentage rate (APR) for the card that we looked at is 9.9% for purchase, 19.9% for cash advances and will increase to 19.9% if you are late making a payment twice in one year. The average APR is about 13%, but as low as 0% on purchases for good credit credit cards. With bad credit you will not be able to qualify for this 0% APR special.

Companies which offer unsecured credit cards for people with bad credit suggest that these cards may improve your credit score. But they probably will not. According to Fair Isaac, the company that invented the current credit scoring process in the United States, many factors affect your credit score. Simply having a credit card will not improve your credit score. If you have available credit then it can improve your credit score, but $72 worth of available credit is not enough to make a difference. Even applying for credit cards with bad credit may decrease your credit score. When you apply, you authorize the company to look at the information on your credit report. This is recorded as an inquiry. Numerous inquiries have a negative effect on credit scores.

So, before you apply for credit cards with bad credit, take some time to learn about what affects your credit score and learn about credit repair options. If you have the money to pay the fees associated with unsecured credit cards for people with bad credit, then you can afford credit repair counseling. In fact, if you have the time to learn about credit repair, then you can do it yourself and pay nothing. For more information, visit Credit Fix Solutions.