Having a guaranteed credit card allows a person who has a poor credit repayment history to borrow money without having to have a credit check done.
For someone who has a bad credit history, having a credit card for bad credit is the only option they have. There are two types of Credit Cards with Guaranteed Approval. They are the cards that are prepaid and a secured credit card. While there are some unsecured cards that are available, these tend to have very high interest and the charges do tend to be very high in relation to the amount of the credit limit that is available. It seems that no matter how bad a person's credit history is, there is a credit card that is available to suit each need.
There are some advantages to having a Credit Card with Guaranteed Approval. First of all you will have access to credit which would not be possible because of having defaulted on a credit agreement. There is also the possibility of having a card to help improve a credit score rating if you obtain a secured card. The lender will be able to send a good reference each month to a credit agency as long as payments are made on time and in full. This helps to gradually repair credit. Having the card can help with monthly budgeting by spreading the payments in anticipation of tight financial times. The card also allows for obtaining expenses such as auto repairs and hotel room reservations.
In addition to having advantages, there are also disadvantages to having Credit Cards with Guaranteed Approval. The most important one to consider is the high interest rate and charges. If there is no credit score to go along with the application, this signals a lender that there is usually a poor credit history. Certainly its possible to avoid secured debt by having a prepaid card, a secured card may involve providing some sort of collateral, usually your home. If you fail to pay your debt you could run the risk of losing your home. Another disadvantage is that having the card is that it may signal impulse buying of items that are not necessary. The other problem with having an unsecured card is the low limit or in the case of the prepaid card, having to load it with cash.