Advantages of a credit card with bad credit
1. Access to credit
People with poor credit ratings are viewed as very high risk; most lenders would
rather not take a chance on them. This practice can leave
out a lot of people because, besides bad borrowers,
it's not uncommon for perfectly responsible people to end up with
poor credit ratings due to unforeseen circumstances or events out of their control.
Credit cards for people with bad credit allow just about
anyone of legal age access to credit, whether you've had
CCJ's, defaults, mortgage arrears or are simply new and
have never borrowed before, bad credit card issuers will
consider you, and except in extreme cases such as a previous
bankruptcy, your chances of approval are high.
2. Improve your credit rating
The positive thing about credit ratings is that they constantly change; however bad yours is, you can always improve it over time.
The most effective way to improve a credit rating is by exercising financial
responsibility, usage of such a card is
one of the ways you can prove that you're financially responsible; if you use the card regularly, make at least the minimum payment each month, make the payments
on time and never go over the authorised limit, your credit score will go up by a few points each month and
might eventually overturn a bad rating.
Alternatives
1. Prepaid cards
These are top-up cards whereby you deposit money onto the
card before you can use it for shopping on the internet or on the highstreet.
Prepaid credit cards are an ideal
option for people with very bad credit history as they do
not require a credit check or even a bank account. The downside is that they can
not be used to improve your credit rating, there's no excercise of financial responsibility.
2. Joint credit cards
If a spouse or family member has better credit history than
you, you may consider applying for a joint credit card; essentially
these are normal credit cards whereby more than one account
holder is allowed, most credit card issuers allow joint accounts, even
with one of the account holders having bad credit history.
The advantage is that you're likely to get
a better interest rate than you would should you apply for a credit card with bad credit individually. It also improves your credit rating
just as a singularly held credit card would.
Note:
A joint credit card also means joint responsibility; any
mistakes, such as a late or missed payment affects all account
holders regardless of who's duty it is to make the payment, therefore it is important to take extra care should you decide to go for this option.
Similar Pages:
Loans for people with bad credit - Bad credit credit cards
Bad credit Loan - Unsecured Loans with bad credit