First Credit

Guaranteed Approval Credit Card Review

More and more people are slipping into some form of unmanageable debt, and as the worldwide economy continues to collapse, the need for a debt solution has become even more important. Guaranteed approval credit cards claim to offer certain acceptance and are a perfect way to re-establish you on the borrowing market. Of course some may be looking to build a credit reputation with no prior debt, and guaranteed approval cards also imply they can help here. However, any carrier offering guaranteed approval is likely hiding something, a clause or condition, so a basic rule for any credit card application is to read the terms and conditions thoroughly, and be sure that you understand them.

The truth is that Guaranteed approval credit cards do not exist, and the reasons why are fairly obvious; however there are numerous secured credit cards that come close to offering similar. Since the economic downturn took hold banks have been reluctant to lend because they deem the risk too high in the current climate, the days of a bank wanting to lend readily have gone. As banks become more cautious, getting accepted for credit could be problematic if you have recently escaped debt and are looking to get back on to the borrowing ladder, or if you are looking to build a reputation.

A guaranteed approval credit card will claim to accept you whatever your credit score may be, this is simply not true and also not feasible. Every bank or lender will want to view your credit rating, and every lender will want to be assured that they will get their investment in you back. If your credit history is poor or sketchy you can still be refused credit, every lender will operate to this. While the existence of a guaranteed approval credit card is a fallacy, there are secured credit cards that nearly make good on the “guaranteed” offer.

If you are looking for a way onto the borrowing ladder then there are many cards on the market that specifically cater for those with a poor credit history or no score at all. Secured credit cards are an alternative to a regular credit card and are ideal for those with adverse credit; but be warned; you need to shop around to get the best deal and not be ripped off.

Secured credits cards often come with high application and processing fees, while annual fees are sometimes charged. APR on a secured card is often high, so shop around if you are looking for the best interest rate available. The way a secured card works is by you the consumer being made to put down a deposit, this deposit is then used as collateral should you miss a payment or fall into unmanageable debt. It is worth mentioning that the credit line you will be given is usually less than the initial deposit you put down, while the deposit is usually set to a minimum limit of between $300-500, the actual credit limit may be much less.

There are certain types of secured credit cards that should be avoided; these include ones that may require you to sign up to some sideline program, such as an insurance policy. However, if you are willing to be patient and look for a good secured card, you may find that it is the solution you were looking for. See also Bad Credit Credit Cards.