Credit Cards for Bad Credit
I will preface this blog with the following: “Credit cards are not for everyone and they are the fastest route to becoming in debt to banks and a poor credit score”! If one is already in the red with their personal finances, a credit card is not a good idea to start with. I was told by my father, a few days after I came to America, that “If you can not buy it now with cash, what makes you think you’re going to have the money 30 days later?”. That stuck with me since and I can say that I was lucky enough to not have those horrifying stories most had with credit cards.
That having been said, and you must really have a credit card even if your credit score is so poor then lets see what is the best way to get one.
1. Find credit cards designed specifically for people with bad credit. These credit cards will typically have a higher interest rate than normal credit cards because lower credit scores are inherently riskier.
2.Be prepared to apply for a secured credit card. Secured credit cards are backed by an account that you maintain. Many credit card companies require a minimum amount of money to be in these accounts at all times to ensure that you can pay you monthly payments.
3. Shop around for interest rates. Just because you may have poor credit doesn’t mean that you have to settle for ridiculously high interest rates. However, don’t expect a low interest rate if you have poor credit.
4. Pay off your balance every month. This will dramatically increase your credit rating and credit history. Showing a lender that you have successfully managed debt in the past will go a long way in getting a new loan.
I will end this article just like I started it, credit cards are not for everyone. the concept sounds terrific but in reality it takes a very disciplined individual to actually benefit from having credit cards. In my opinion, and I am very conservative with my finances, once should only have a credit card for the sake of convenience not as access to new money.
