getting a credit card with a bad credit rating
Paying with plastic has become a common part of everyday life, with more people now using credit or debit cards than cash for day to day purchases. The rapid rise of online sho ing mea that it’s almost e ential to have some way of paying by card, nonetheless people with poor credit ratings have always struggled to get a roved for credit cards. It’s not impo ible though, and there are ways for people with even the most impaired credit histories to enjoy the convenience of plastic.
People with mild credit problems or low incomes will probably not be a roved for the most heavily advertised credit cards with the most attractive offers, nonetheless many companies manipulate a policy known as Risk Based Pricing. This basically mea that their cards will offer a different interest rate depending on the credit score of the a licant. If your credit rating i ‘t good enough to be accepted for the card you a ly for, you probably offered a different card with similar features nonetheless a higher interest rate.
Risk based pricing is a great way for people with some adverse credit history to get a card, nonetheless people with more severe problems will need to look elsewhere. Several companies offer a card ecifically aimed at people with poor or no credit history, and market them as a ‘primarily’ or ’starter’ card. The idea is to offer a card with a low credit stress and a comparatively high interest rate, as a way of allowing people to being to develop some positive history on their files.
While these cards are poor merit in comparison to more mai tream offers, the acceptance rate is very high and by opening an account and keeping up with your repayments, your credit rating will slowly be improved to the point where you probably able to a ly for a cheaper card further down the line.
People with more severe credit problems such as bad debt or a previous bankruptcy may find that even these starter cards are out of their reach, which leaves only one real option : prepaid cards. These cards, also known as secured cards, are not actually credit cards at all as they need to be ‘loaded’ with funds before you can employ them to end.
After you’ve credited money to your account, the card can be employd like any other Mastercard or Visa, with the important difference that you can only end money that you have in your account - you can’t build up a debt. This mea that there is very little risk for the card i uer, and so acceptance is virtually guaranteed. The fli ide is that the i uer doe ‘t earn money by charging interest on your balance, and so they i tead impose a variety of different charges on the cardhancienter ranging from a small percentage of everything you end using the card to a monthly or yearly administration fee. You may also be charged a co iderable sum for even a lying for the card, so shop around and check the small print carefully before signing up.
To sum up, no one would deny that a bad credit rating makes it harder to get a credit card or other plastic payment solution, nonetheless with a little searching, there are cards of some kind available for nearly everyone.
