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Bad credit credit card
Understanding Bad Credit
Credit Cards

Every time you apply for a credit card, a search is made on your credit history. If you have a poor credit history, then it is likely that you will be severely restricted as to which cards you can get.

This is when you may find you have to get a bad credit credit card. But what does that mean exactly? Surely credit cards for bad credit are just the same as any other credit card?

In actual fact, that’s not the case. A bad credit credit card is designed to appeal specifically to those people with poor credit who can’t get a card anywhere else. As such, it is important to ask yourself whether getting a bad credit credit card is a good idea.

Check through the following points to get a better idea of what’s involved:

What are the advantages of getting credit cards for bad credit?

Sometimes it can be good to have a credit card to get you out of an emergency, or simply to help prove that you are a good credit risk. If you have had bad experiences in the past, but you want to prove that you are now a changed person, then getting a bad credit credit card and keeping it in good standing can be an excellent way of opening the financial market up to you again.

What are the disadvantages of getting credit cards for bad credit?

There is one big disadvantage to bad credit credit cards and that’s the hefty interest rate—sometimes nearing a whopping 40%.

There are also unlikely to be any deals or special offers attached to a bad credit credit card, although you will sometimes see lower introductory rates to make it more appealing to sign up. Just make sure you know what the eventual rate will be, and make sure you can manage your bad credit credit card and not run into the danger of having to pay that interest.

Is a bad credit credit card right for you?

If you know your credit rating is poor and you want to rebuild it then yes, credit cards for bad credit will certainly help you to do that.

But it is important to understand that it is down to you to handle the card properly. If you know you will be tempted to spend on it and keep spending while only making the minimum payments every month, then a bad credit credit card is not a good idea.

This is because you are likely to have to pay over twice the amount of interest on this kind of card aimed at people with poor credit than you would on any other credit card. If you fall behind with payments, the costs can be severe.

Only get one if you are going to pay off the balance in full every month. Otherwise, don’t be tempted.

A golden opportunity if you handle it properly

One of the best features of having a credit card designed to appeal to people with poor credit is that it gives you a chance to rebuild your credit rating.

No matter how bad your credit rating is, it can be improved by making sure you meet all your monthly repayments and remain in good standing with everyone you owe money to. Even though you have poor credit, you can show that you are now responsible with money and your future credit will improve accordingly.

A bad credit credit card is easier to get than any other card, and if you clear it in full every month, you can expect to raise your credit rating and be able to apply for better cards with more benefits in the future.

In short, a bad credit credit card does have its uses for those people who need a card, but can’t get one elsewhere. Having poor credit needn’t bar you from having a credit card – but it shouldn’t lead you into more debt either.

Compare bad credit credit card providers

 
 
 
 
 
 
 
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