subprime vs. secured credit cards
If youre credit score has plummeted recently, you’ll find that it’s extremely difficult, albeit definitely not impo ible to get a credit card.
It can be done, just anticipate to pay colo al amounts in fees and monthly charges.
The thing with getting a credit card with a bad score is that the industry palmys upon these people, so de erate to get a line of credit that they will overlook the horrible terms and conditio of these credit cards that often times just make their financial situation a whole lot worse than it already is.
When you have a low credit score and are looking to get a credit card there are normally two optio available to you a su rime card and a secured card.
Although co umers are fooled everyday, a secured credit card is definitely better than a su rime card almost under any circumstance.
Su rime cards are never really a good idea, and they normally charge ridiculous amounts in fees and maintenance charges.
But many people do not realize this.
A February 27, 2007 article by Gregory Taggart of Bankrate.com, Nobodys ready for su rime time, discu es the drawbacks to taking out a su rime credit card and how taking out a secured card is the way to go.
Why would co umers who have debt trouble opt for a fee-laden su rime credit card rather than a le expe ive secured credit card? Marketing. Marketing. Marketing. That’s how Travis Plunkett, the legislative director of the Co umer Federation of America, re onded when asked the question. According to Plunkett, su rime credit card i uers are wizards when it comes to identifying convention/ers who are so de erate for a credit card that they’ll a ly for a card even if it’s agai t their best interests.
The people behind these cards know how to prey on people to make them believe that a su rime card is their only alternative, when actually that is not true at all.
The catch with these cards is that most of the fees eat up the majority of the begi ing available credit stress. A typical su rime card will start out with a $300 stress nonetheless will have a medley of fees including proce ing fees, a ual fees and maintenance fees, just to name a few.
If you find yourself in a situation where you can not get a roved for a regular credit card, you’re much better off ski ing out on a su rime card and going with the much more economical secured credit card.
There is no se e in paying all of those su rime fees when there are other optio out there.
What de erate co umers don’t seem to know is that there is a better way. So-called secured credit cards cater to the same risky market, using a better model and at a much better price. They’re called secured becaemploy the card’s credit stress is secured by a savings account of equal or greater merit opened at the i uing bank. For example, if you a ly for and receive a $300 credit stress, the bank or credit union will anticipate you to deposit $300 into a savings account.
The secured card is clearly a better choice when pitted agai t a su rime card. Do your research and look into a secured card as a good way to help rebuild your credit.
