Credit Cards For People with Blemished Credit By FederatedCreditCards.Com Copyright © 2008

It's inevitable in our free spending society that some people's credit will suffer with each downturn of the economy. Layoffs or reduced income can lead to cycles of deepening debt while trying to make ends meet and to pay the monthly bills. This ultimately leads to blemished credit. The only good news is blemished credit can be rebuilt over a few years time.

Credit cards are available to people with bad credit. These however are much more restrictive than standard consumer credit cards. They typically will offer much smaller credit limits, higher interest rates, and little in the way of rewards. Even with these restrictions these credit cards are worthwhile to have. They provide a level of financial security in times of low cash reserves, a degree of convenience, and a means to start to rebuild your credit by making payments on time every month.

There are generally four main categories of credit cards that are available to people with bad credit. They are listed, and detailed below, but there is also further reading available on their subjects as well, if you want to learn a little bit more about any of these categories. After you've read each category's descriptive article, and explanation, we're confident that you will be more able to find the credit card that's right for you.

Unsecured Credit Cards: This type of credit card is very similar to a standard credit card that someone with good credit would use, except that it has a much lower line of credit, and also, much higher fees. Unfortunately, a low credit score is viewed as higher risk by the credit card companies, so they charge correspondingly higher rates to compensate.

Secured Credit Cards: These cards are called "secured" because they are backed by funding in your bank account. The credit card company does not have to be worried they won't be paid, because as soon as a bill remains unpaid, the funds are drafted directly from your bank account. In this way, it acts almost like a debit card, --but there are advantages of the Secured Credit Card, in that it is much easier to get approved by the credit card company.

Prepaid Credit Cards: This category of credit card is very similar to a debit/ATM card in some ways. But it offers the same conveniences as a regular credit card. How it works, is that you load an amount money onto the card, and use the funds like you would a credit or debit card. When the money runs out, you refill the card. A bank account is not required to use prepaid credit cards and they are accepted for online or telephone shopping like any other credit card.

Store Credit Cards: These credit cards can only be used to purchase items from a particular store or store catalog. They tend to offer a little larger line of credit and are a good way to rebuild your credit score if you make payments on time.