best credit cards

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. In fact, the company has stated that its focus moving forward will be to provide quality goods and services to its customers in its retail stores. Consumers looking for credit cards for bad credit may be turned away by Target. Other lending institutions and banks are joining the movement in tighter standards, as well. Account delinquencies have caused institutions to decrease credit limits, increase rates and even cancel some accounts. Another company that followed suit and even raised the bar for standards is American Express. 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. It seems that anyone looking for credit cards for bad credit will not be able to do business with AMEX.

With all the restrictive lending standards being adopted by credit card companies, where do consumers turn when they need credit cards for bad credit? Credit card accounts are one of the ways consumers build their credit history and scores. You cannot have a credit file unless you have some 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. The balance has been paid, so spending beyond means will not happen. 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. Prepaid cards have an added bonus in that they train you to think about credit card spending differently, since it is your money paid up front. The disadvantage of cards that are paid in advance is that some require a small usage fee and they will not help you build your credit score or history.