Credit card terms you need for improving bad credit

Advertising Disclosure

Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from many credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » Research » Guides » Building Credit History » Credit card terms you need for improving bad credit

Credit card terms you need for improving bad credit


Updated: December 26, 2012

By
Add to Favorites:
The credit card market offers a wide variety of cards for all kinds of customers. These credit cards are tailor made depending on the lifestyle of the customers, their spending habits, income levels and a host of other preferences. However, these credit cards could also lead to the downfall of the customers in the longer run, causing their credit histories to worsen. That is the reason why credit card holders should look for the right credit card terms based on their credit card history. Here are some favourable credit card terms especially for those consumers who are trying to recover from a bad credit history. Low interest rate is the key to avoiding financial mess Credit card interest rates are significantly higher than the interest rate on bank loans. That is why the debts on credit cards are far more expensive than mortgages or bank debts. Therefore credit card holders who have a bad credit history should first try to go for credit cards with much lower interest rates, irrespective of what the other terms are. This offers a very useful benefit. If you have a bad credit history, you are very likely to have a high outstanding debt. A card with lower interest means that your debt is not mounting at an alarming pace, giving you the time to manage your finances and repay the debt in time. On the other hand, a rewards credit card with a high interest rate could send your debt spiralling upwards, leading to financial mess. Hence, if your income level doesn’t permit you to repay large amounts, it is better to go for low interest rate, bad-credit credit cards. Reasonable credit limits The credit history depends on the ratio of outstanding balance to the available credit limit. Therefore, for the same outstanding balance, a lower credit limit means a poorer credit score. A higher credit limit will offer more breathing space and also lower the risk considerably, of incurring a penalty for exceeding credit limits, especially during holiday seasons. Therefore, those with bad credit history should ensure that the sum total of the credit limits on their credit cards is as high as possible. Useful credit card rewards The rewards and their nature vary from one card to another. This is why credit card customers should take extreme care in ensuring that the rewards available to them actually help them out of bad credit rather than pushing them further into it. For example, a cash back reward or a discount on gas purchase will reduce your expenses, and therefore your debt. On the other hand milestone expenses, which offer discounts only if you purchase over and above a fixed limit tempt you to spend more and therefore worsen your credit history. Therefore smart customers usually distinguish between the credit card rewards and pick those which suit their lifestyle as well as income. 0% balance transfer credit cards are a good example of cards that will help you recover quickly from a bad credit history.

Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.

Related Research:

Interest Free Credit Cards: Pay No Interest Until 2019

Interest Free Credit Cards: Pay No Interest Until 2019

By Credit-Land, Posted: May 23, 2017

Carrying a balance on a credit card is wasting your money on interest fees. It is easy to avoid interest payments on purchase transactions by paying off the entire card balance by the due date each month. But what to do if you are already ... Continue reading
Dashlane: Password Management and Shopping Ease in One Simple Product

Dashlane: Password Management and Shopping Ease in One Simple Product

By Angela Rose, Posted: May 3, 2017

Are you terrible at remembering passwords? Are you so terrible, in fact, that you often use the same one for multiple websites? If so, you’re not alone. Continue reading
SoFi Making Lending Social

SoFi Making Lending Social

By Dar Dowling, Posted: April 26, 2017

Since 2011 SoFi, a San Francisco based online lending company, took the lending industry by storm, when they became the first online lender giving people access to affordable student loan refinancing. Continue reading