As with other things in life, it pays to be responsible. It is so important for your financial freedom to have good credit and maintain as high of a credit score as possible. Nowadays, people with bad credit are given more opportunities than ever before. What they don’t realize, however, is that they are paying a horrible price. Here are five major reasons that a “bad credit” credit card can cost you hundreds or even thousands of dollars each year.

1. Interest Rates. If you have bad credit, you can still get a credit card. But, do you know how much your interest rate will be? Your interest rate will be considerably higher if you have bad credit. This is because you are viewed as a financial risk. Lenders will only give you a high interest rate until you have proven that you are no longer a credit risk. With bad credit, you probably won’t ever be offered a credit card with 0% APR. Instead, your introductory rate will be at least 15%.

2. Processing fees. Get prepared to pay a one time processing fee if you have bad credit. Lenders say “one time processing fee” to make it sound nominal. However, this is not the case. You will be charged a processing fee to cover the risk associated with lending to you. Save yourself money by only having good credit.

3. Annual fees. There are many credit cards available with no annual fee. If you have bad credit though, don’t expect to qualify for one of these cards. Once again, you’ll be charged an annual fee to cover the risk of lending to you. Annual fees aren’t just $20 per year. You could pay hundreds of dollars per year to have a “bad credit” credit card. Many credit card issuers will also charge monthly maintenance fees to your account.

4. Late payment fees. You certainly won’t be paying $10 late fees if you have bad credit. Credit card companies increase your late fee depending on how bad your credit is. Not only will you be paying quite a lot more for late payments, but credit card companies will be quick to report your late payments to credit bureaus. Save yourself money and the added embarrassment of paying late fees by making your payments early.

5. Lower credit limits. You can expect a lower credit limit if you have poor credit. This is because of the financial risk associated with low credit scores. Lower credit limits can also lower your credit score based on the balance amount charged relative to the total credit limit amount.

As you can see, there are several ways a “bad credit” credit card can cost you more money. It would be better to take a few months and fix your credit before applying for a credit card. You will get a better interest rate, no processing or annual fees, lower payment fees and higher credit limits. Give yourself all the opportunities you deserve with good credit.

You can’t really do much these days without a credit card. Even if you plan on using cash at the groceries store or to buy gas, you may still find yourself in a rut without a credit card. It can be really difficult to get a credit card if you have bad credit. A secured credit card may be just what you need to re-establish your credit.

A secured credit card is one that is tied to a cash collateral. In other words, you can only put as much money on the credit card as you have in cash. Say you deposit $1000 into the account. You can only put $1000 on your credit card. The nice thing is that you can add money to your account as you go and you’ll never spend more money than you have.

On our website, you can find a list of several different issuers who have secured credit cards available. You can also get a secured credit card through your credit union or bank. More than half of the credit unions around the country offer secured credit cards to their members. When choosing a secured credit card, it is important to shop around. Choose a card that doesn’t require an application fee. Also make sure that your collateral isn’t going to be swallowed up by monthly maintenance fees, annual fees or application fees.

Some banks are moving away from secured credit cards and towards unsecured credit cards. They are trying to lure people with bad credit into getting an unsecured credit card with a lower limit and outrageous interest rates and fees. If you have bad credit, stick with a secured credit card. This will get you back on track the safe way and you’ll be able to rebuild your credit with your own money.

It is important to understand that, as with all credit cards, there are good companies and bad companies - make sure you shop around. Choose a card that is going to help your rebuild your credit and manage your money. Some companies out there offer secured credit cards, but they are actually a disadvantage to you. Make sure your secured credit card is going to benefit you and your finances. Get a secured credit card that isn’t full of fees and reports to the three major credit bureaus. Without having them report, you are losing a key component to rebuilding your credit.

As with any credit card, you need to use your secured credit card wisely. Make a few purchases each month and be sure to pay off your credit card completely at the end of the month. Rebuilding your credit has never been easier than with a secured credit card. Shop around and choose the best card for you. Be smart with your card and use it responsibly and you’ll have good credit in no time.

You aren’t the only one who feels like you’ll never have good credit.  It seems like only yesterday when you qualified for anything you wanted.  What happened?  How did it happen so quickly?

Millions of Americans feel just the way you do.  Your credit card and other bills are piling up and you can’t seem to even qualify for a new car, let alone your dream home.  Follow these proven steps to rebuild your credit.

1. Stick to your budget.  Budgeting is a fundamental element in rebuilding your credit.  Budgeting will keep you from spending more money than you make.  Carefully look at your income and what you spending your money on.  Make sure you are paying your creditors before going on that mini shopping spree.  Review your budget daily, if needed.  As you do this, you will be able to track exactly where your money is going and you’ll be able to cut back on unnecessary spending.

2. Rank.  Make a list of all the creditors you owe money to.  Put them in order of highest interest rate.  Be disciplined to pay off those highest interest rate accounts first.  You’ll be surprised how much money that actually saves you because you won’t be paying as much in fees and interest.

3. Cut your balance.  First of all, try not to carry a balance on any of your credit cards.  If you have to carry a balance, especially while you are working to pay it off, keep it less than 40% of your limit.  For instance, if your limit is $2500, your balance should be no more than $1000.  This alone will cut back on your dependence on the credit card.

4. Check your report.  Make sure you check your credit report at least once a year.  Financial experts recommend that you check it every three months.  As you do this, you will be able to correct mistakes much faster.  You will also be able to watch out for identity theft this way.  The best way to rebuild your credit is to be informed and also stay informed.

5. Get help.  If you feel the burden of financial stress, seek the help of a financial planner or credit counselor.  Don’t wait until you are late on your payments and you have stacks and stacks of unpaid bills.  These professionals will be able to help you get a hold of your finances long before the creditors know there is a problem.

It will take patience, diligence and a great deal of will power to rebuild your credit.  It takes a lot longer to rebuild your credit than it takes to hurt it.  Make sure you plan ahead and stick to the plan.  This will help you steer clear of additional unnecessary debt.  Stay focused and you will see the improvement; in your credit score and in your spending habits.