Monthly Archives: August 2015

Finance and Credit Tips for those with less than perfect credit

Sadly many people ended up in the subprime category due to the recession or some unfortunate event that has happened to them such as losing a job, or a major medical issue. Many of these same people lost their credit card accounts and for years struggled with finding a new one. Flash forward to today and you will find that bank lending to consumers who fall into the subprime lending pool is on the rise, thanks to banks realizing that they need to extend their customer base to realize greater profits. Most of these consumers do deserve a second chance at credit, and deserve a shot a rebuilding their credit scores.

If your credit score is below 660 you fall into this subprime category. Yet several major banks are offering people with these scores options as far as credit cards go. Just because you are being offered a credit card however does not mean you will be getting a good deal. These cards have higher interest rates and fees to make up for the rather large percentage that will default on payment. Think of these credit cards as simply a tool to rebuild your credit history, and the higher interest rates along the way as simply paying your dues. While the terms you may be offered might not be good, you do not have to stick with that credit card, simply make use of it as a stepping stone until your credit score improved to the point that you qualify for a better card.

The question is not if you can find a credit card for those with bad credit, the question is will you find just the right card. Finding a credit card for those with subprime credit that has low interest or low annual fees will be difficult. This will become easier if your score rests between 620 and 659, in which case your credit score is listed as “fair” credit. For those with fair credit there are some decent offers available, but the APR will still be high. Good cards for those with fair credit will include some perks like a rewards program and little to no annual fee, despite a higher APR. If your score falls below 620 take what you can get until your score improves.

Also good news is the fact that your credit score does not have to stay low. You can rebuild it quicker than you think. Yes it takes some time, anything worth anything takes time, but it does not have to take 7 years to accomplish. All you have to do is apply for one of the cards that are accepting people with poor credit and pay your bills on time, every time. This of course means limiting your purchases to what you know you can afford to pay back, and meeting more than just the minimum payment on your credit cards. Making just the minimum payment will not get you very far, but at least it will not damage your credit score, if you can at least make the minimum. Credit card companies are looking for just the right mix of paying off the balance and carrying over a little balance now and then. Your credit report on the other hand will be leaning heavily on your payment history and your credit utilization rate. You should be working towards paying off your entire balance in full every month to a avoid interest, and this way no matter what the interest rate is on your card, it will not affect you in the least.

Some credit cards should be avoided however, such as First Premier’s Platinum card, which is aimed at consumers with bad credit scores. This card costs over $200 in just fees per year. That does not even take into account the 36% interest rate that this card carries. Even if your credit score is worse than what you would find in a N.Y.C trash dump, you don’t deserve a credit card that bad. You do no need to be beaten and curb stomped when you are already down. Avoid offers such as these if at all possible. First Premier is just as bad as a payday loan lender. Their cards are among the costliest credit cards in the industry.