Credit Cards For Bad Credit: How You Can Steer Clear Of Fees
Posted October 27, 2010 – 7:47 am in: MortgagesIndividuals with troublesome credit histories often suffer unfairly from high mortgage, insurance, and car loan rates. In addition, they usually have difficulty getting approved for credit cards. The whole situation can get extremely frustrating. Frequently, I get emails from consumers wondering what they can do to rebuild their credit. The first thing I tell them is to obtain a credit card designed for those who have poor credit. Next I tell them is written in bold: READ The small print.
There are merely a limited number of credit cards for people with bad credit. Initially, many look the same. All of them help build and rebuild your credit by reporting to the major credit bureaus on a monthly basis. All of them provide you with the Visa or Mastercard you have to make many purchases. And they are all necessary evils that can save you 1000s of dollars in mortgage and car finance rates later on. However, you must read the small print before applying for one of these credit cards, because they often charge high yearly fees, set-up fees, and even fees each month. Here, I will examine several examples of charges current “bad credit” charge cards bury in the fine print. Of the three major cards I’ll examine, only one stands out as consumer-friendly.
“Bad Credit” Charge card #1: This credit card charges an extremely low rate of interest for an credit card. However, your first small print glimpse reveals that there’s a one time setup fee of $29. Not too bad. So far, because the next charge is really a one time fee of $95. To date, we’re up to $124 in expenses. That’s got to be it, right? No. Add another $48 for that annual fee and $6 monthly in account maintenance fees. That brings the cost of your new charge card to $244 the first year, and $120 each additional year. This really is no small change, along with a card such as this should be considered only if you fail to be accepted for any better credit card for bad credit.
“Bad Credit” Credit card #2: This charge card charges a very high rate of interest for an credit card. This can’t be good. But the setup fee is only $29. Maybe this card isn’t so bad. There’s that pesky monthly maintenance fee of $6.50 monthly that can bring the price of this unsecured credit card to $107. Maybe we’ve found a bargain. Not quite. The annual fee is really a whopping $150. Yes, $150 every year. That does not only brings the initial cost up to $257, but you will also pay $228 a year just to keep up with the charge card. There needs to be a better offer.
“Bad Credit” Credit card #3: This credit card can be obtained as both a secured and credit card, based on the issuer’s review of your credit report. Interest rates are average, even competitive. Now, the small print reveals that there’s a one time setup fee. However, based on your credit, this fee can be as low as $0 or up to $49. To date so great, particularly if your credit isn’t that bad. But, there has to be a huge annual fee. Not exactly. The annual fee for any secured credit card is only $35, as well as for an credit card, this fee is often as low as $39 or as much as $79. To date, the cost of this card ranges from $35 to $128. Now it is time for that monthly maintenance fee. That one has to be huge. Or not. Its $0. Which means the most you can possible be charged to obtain this charge card is $128, about 50 % of what competing cards are charging.
Clearly, you will find substantial differences between “bad credit” credit cards. Of the three offers we have examined, only one doesn’t take you to the cleaners. Actually, “bad credit” credit card #3 provides great value. All positive changes to your credit report and credit rating will result in lower loan rates, lower credit card rates of interest, lower insurance costs, and ultimately, thousands of dollars in savings. The path to rebuilding credit has its costs, but in the long term, rebuilding your credit with a “bad credit” charge card may be the fastest and most cost-efficient way to correct the often unfortunate circumstances which have damaged your credit to begin with.
Set aside a regular day, time, and place for paying bills. Develop a personalized credit repair plan that addresses your unique financial situation. Consider speaking to lenders face-to-face if you have a bad credit score. How To Raise Your Credit Score In 6 Months
categories: finance,credit repair,credit,debt,debt consolidation,mortgages,family
