What You Should Know About A Guaranteed Credit Card

Find out what methods companies use to make these offers.

10:23 14 April 2013

There is a lot of confusion surrounding the idea of a guaranteed credit card. There are actually many stipulations in some cases that need to be followed in order to obtain a credit card.

 

Here are a few of the ways that companies are able to offer what seems to be a guaranteed credit card offer.

 

• There may be an offer that the company already pre-screened you for, but smaller print may reveal that the offer is only good as long as nothing changes. If a credit scores changes or income changes, they may refuse you.

 

• A guaranteed credit card may also mean that they will offer you what is sometimes known as a “secured card”. This really is a savings account of sorts. You deposit a certain amount of money which the credit card company “allows” you to use. The benefit of this system is that the credit card company may have a plan in place to develop a financial relationship and to help you improve your credit score.

 

• Other guaranteed credit card offers may simply be referring to a prepaid credit card which can be picked up in a shop.

 

• Some companies may allow you to have a credit card, but will give you a very low credit limit so they reduce their risk level.

 

• Small print simply says “to those who qualify”.

The bottom line is that if we’re talking about a true credit card company where they loan you money, and you repay, there really isn’t a guarantee.

 

They will check your credit unless there is a programme which limits the amount of money you could end up owing them, such as the secured card or the lowered credit limit. Make sure you read all the details for any offers that come through claiming they can give you a guaranteed credit card.