Unsecured Credit Cards for Bad Credit: Knowing What Is Out There
Being trapped in bad credit is never a preferable situation and one should try and come out of this situation as early as possible. Getting credit cards can never be an easy take with bad credit because the lenders and the credit card companies do not have faith in the borrowers with a bad credit and will always like to avoid such decisions.
Well, the current economic scenario has seen a lot of people face bad credit and the number seems to be rising. This has affected the credit card companies too. If they continue to maintain the criteria for the approvals as high credit score of the applicants, there is a lot of probability that they are rarely going to find people interested in taking the credit cards. Looking at this they have come up with the option of the unsecured credit cards specifically designed for the people with bad credit.
One should remember that the credit card companies are in the business of profit making and this will only be attained if they increase their customer base and their customers use their cards to the maximum limits. So the more credit cards they issue higher are their profits. But the credit card companies are bound by the guidelines of operations set the US government and there are some which are of their own too. These companies are required to strictly follow their policies and the guidelines. So, anyone looking for the credit cards with bad credit need to check for the qualifying criteria as set by the companies. At times the applicants will be required to put in some effort to convince the lenders that the bad credit is your past and you are seriously working on improving your credit ratings.
So after all this if you know that you will be approved the credit cards, it is time to take a look at the costs involved in keeping the credit cards and in using them as well. What one needs to check on is the kind of interest rates that are offered on the cards and the other offers associated with them. If the costs are really high , then it will be better to negotiate for the rates or leave the options completely.
Unsecured Cards Explained
With these cards becoming common and a majority of the applicants are looking for the bad credit cards, it can be easily understood that the credit card issuers bear all the risk associated with these cards.
Well this requires the card issuers to cover their risk in whatever ways possible. High interest rates and lower credit limits are one of the most popular ways and means adopted by the credit card companies to cover the risk they have taken. In normal cases the interest rate on the credit cards are between 8-14% but when it comes to the bad credit cards the interest rates can be as high as 15% 20%. If you look at the credit limits they can be as low as $10,000.
All this indicates that if you were to use the credit card for any purpose you need to ascertain that the requirement is really important and you can repay the credit card dues well within the grace period.
Avoiding High Card Costs
When you are using the credit cards and have a bad credit, it is advisable that you exercise the highest control on your expenses. If you are able to manage the credit card well there are all the chances that you will be able to keep the related cost low. In case you are able to clear all the credit card dues every month in full , you will see your bad credit improving gradually.
All of us know that any dues on the credit card will require high interest rates to be paid by the consumers but there are just few people who are aware of the fact that any discounts and offers which you availed using the credit card for purchase will be eliminated and the interest rate will be charged from day one on them.
It is therefore required that you keep your expenses within the permissible limits only. If you can maintain your credit card utilization ratio to 30% of the allowed credit limit you will find it much easier to control the expenses and at the same time will have enough limit with you to be used at the times of emergencies avoiding the payday loans or the unsecured loans of the same sort.