Credit Cards for Poor Credit

Although some consumers are irresponsible with credit, some responsible people are caught in situations where they are unable to clear their debts on time, for example due to illness, family problems or when one loses a job. Having a bad credit score due to circumstances is not permanent as you can always redeem yourself. Credit Cards for poor credit are designed for people who have bad credit and who want to raise their rating.

There are various reasons that would justify obtaining a credit card for poor credit, for example if you had filed for bankruptcy in the past, it would be important to re-establish your credit. You should take advantage of these types of Credit Card to prove your credit worthiness.

Credit Scoring
If your credit card is approved, your credit card company will be submitting monthly reports to the credit agencies regarding your credit performance. Due to the fact that your credit performance is being monitored closely, if you pay your creditors on time and are able to maintain a low revolving balance, this information will be reflected in your credit records. If you maintain a good record over time, your credit rating will improve and you will be able to qualify for major financing such as a car loan and mortgage. However, if you are not able to walk away from the past mistakes, you will destroy your rating completely and it will be very difficult for you to obtain any type of credit card from any credit card company. It is important to note that if you want to improve your credit rating you must maintain a low revolving balance, make credit card payments on time and also avoid skipping any payments.

With regard to your credit history, credit companies will take caution when extending credit to you. Therefore, when you receive a credit card for poor credit, you will be allowed a small spending limit. However, if you are able to make regular payments for some months, your credit limit will be raised. You should maintain this consistency because if you fail to make payments at the right time, you credit company holds the rights to lower your spending limits and may also increase interest rates.

High Interest
If you are applying for a credit card for poor credit, you must understand that it comes with a higher finance charge as compared to normal credit cards. Therefore when shopping for a credit card, you should visit different companies to determine which one has rates that are favourable to you. Whether you decide to settle for a secured or unsecured credit card for poor credit, the best place to look for it is online. Online application is easy and some companies will approve your application instantly. Applying online also gives you an opportunity to scrutinise different credit card companies, you are also able to determine which ones have introductory rates.

After using these cards for some time and after managing to repair your bad credit history, you can now apply for a normal credit card which has more benefits and low interest rates.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s