Bad Credit and Credit Cards
Nowadays everybody in the States has a credit card – or more often a whole bunch of them. For many people life without a credit card is unthinkable and being unable to get one is a real nightmare. Well, for most people obtaining a credit card is not so difficult. In many cases it is the credit card issuers who chase you in order to make you accept their credit card. But if you have had bad credit in the past, the situation is somehow different.
In a country where access to credit is determined by factors like current income and past credit, having a bad credit report is something like a financial death. But times are changing and nowadays there are decent credit card offers even for people with bad and very bad credit, so even if you were forced to file for bankruptcy, you will still be able to stand on your feet. It is not exactly life after death but certainly the way to recovering your good credit record is neither short, nor an easy one.
The good news is that there are really many offers for credit cards. Don't take it wrong – this is not so because credit card issuers are concerned about how a poor bankrupt guy or girl will make it in life. Not at all! Credit card issuers are hunting for new possibilities to make money and since the bad credit market becomes more and more lucrative that is why more and more credit card issuers offer credit cards for bad credit.
You might think that credit card issuers are taking advantage of you and you are right because most of the possibilities you have, are much worse than the possibilities for somebody with good or excellent credit score. This is easy to explain – when you have a history of missed payments, you are considered a higher risk for the issuer and as a kind of an insurance against you not paying them, they offer you less favorable conditions.
Generally, there are several possibilities for getting a credit card when your credit record is bad. The first possibility is getting a secured credit card, which basically means that you pay your credit limit in advance. You might also be offered a credit card that requires a co-lateral, so if you have somebody, who will co-sign with you, this is also an option.
Another possibility is an ordinary unsecured credit card but usually the catch here is the higher interest rate and all the fees that you have to pay. Still, it is not impossible to find an unsecured credit card with interest rates that are not 20 percent points above the market average.
When shopping for a credit card for bad debt, it is very important to know what you are looking for. If you are looking for cheap credit, chances are that you will hardly find it. Most likely, you will be offered high interest and/or low limit credit cards, so if you really need cheap credit, you'd better consider an alternative type of financing – for instance a personal loan or even a mortgage, if the terms on the credit cards you are offered are too severe.
But if you are looking for options on how to rebuild your good credit, you are more likely to succeed. If you plan to pay off your balance in full, then even a high interest credit card is OK because you actually don't plan to pay the interest. So, if you are a diligent payer, you might be able to restore your good credit record in six months or a year and than apply for a better credit card.
Finally, if you are looking or a bank card as a means of payment, not as a way to get cheap credit or to rebuild your bad credit rating, you may also consider the plain old debit cards. They don't have all the advantages of credit cards but are widely acceptable, so you still will be able to make a lot of payments with them. But the most important thing is never to give up. Don't allow bad credit to crash you. You might be out of options but when one is constantly trying, sooner or later success will come!