Five reasons to apply for credit cards for people with bad credit history

ADVERTISING DISCLOSURE

ADVERTISING DISCLOSURE:
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from most 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 » Five reasons to apply for credit cards for people with bad credit history

Five reasons to apply for credit cards for people with bad credit history


Updated: December 26, 2012

The content is accurate at the time of publication and is subject to change.
Some individuals have a bad credit history for various reasons. Credit bureaus generally keep track of all the credit related transactions of a person. Therefore the consistency with which an individual pays his or her bills, the number of times one applies for loans or credit cards, etc. are all monitored by the credit bureaus. Every time you apply for a new bank loan or credit card, the lender requests the bureaus for your credit score which is generated based on your credit history. If your score is below average, then you would find it hard to get credit from companies, as you represent a high risk profile. However, there are lenders and credit card issuers who provide credit to such individuals. These credit cards meant for individuals with bad credit have a lower credit limit or a higher interest rate. However, they provide some benefits as well. Only chance to improve your credit history If your credit history is bad and you are not receiving credit from reputed card issuers then bad credit, credit cards will help you get your credit rating back on track. Credit score can be improved through greater consistency in paying bills over a period of time and by reducing the amount of debt that you have. If you don’t have a credit card at all, then your transactions cannot be tracked by credit bureaus any more. As a result, your lines of credit will completely dry up. You can always upgrade to better card terms If you are not able to get approval for regular credit cards, you can always go for secured credit cards. These are credit cards, where you have to pay an initial security deposit in your account. The lender can claim this deposit if you fail to pay the card debt on time. However, if you consistently make your bill payments over a period of time, you can upgrade or request the card issuer to sanction an unsecured credit card, instead of a secured one. So, bad credit, credit cards sometimes help you start the whole process of credit history recovery which is imperative for various reasons. Balance transfers help you save money Some credit card customers are offered an opportunity to transfer their balance to another card, with a lower introductory interest rate during the promotional period. This is the time when you are charged very low or no interest rate on your debt. As a result all your payments can be directed towards repaying of the debt that you have incurred. If your existing credit card charges you an excessive interest rate on your debt, then balance transfer to a lower interest rate credit card, will be a good way to focus on repaying off the debt. It will also provide motivation to organize your finances so that you can get rid of your debt in time. Transferring your balance to another card will also allow you to increase your credit limit without increasing the debt, thereby increasing your credit rating which depends on credit utilization ratio.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.

Related Research:

Autumn 2018: Best Rewards Credit Cards for Thanksgiving Shopping

Autumn 2018: Best Rewards Credit Cards for Thanksgiving Shopping

Posted: November 8, 2018

Thanksgiving is coming, and whether you are hosting a meal or coming as a guest, your spendings are going to accumulate faster than you can notice. A holiday feast is a costly matter – each year Americans spend around $50 on a Thanksgiving ... Continue reading
The Best Credit Card for Earning Cash: Discover it® Cash Back

The Best Credit Card for Earning Cash: Discover it® Cash Back

Posted: November 2, 2018

You’ll have hundreds of dollars in your pocket in no time because you’ll earn money back on every purchase you make with this card. There are no restrictions on the amount of cash back you can get, and Discover even matches every penny you ... Continue reading
Top 5 Cards for Travel from Our Partners: Autumn 2018 – Expert’s Choice

Top 5 Cards for Travel from Our Partners: Autumn 2018 – Expert’s Choice

Posted: October 10, 2018

Nights are drawing out, the wind is colder every day and you already feel the lightest breath of winter on your face - autumn is here. Holidays are over, kids are back to school and all you are left with are hefty holiday bills that you ... Continue reading
You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!