Why Bad Credit Cards

Category: Finance, Credit.

Unsecured methods of debt consolidation are among some of the most available debt consolidation options out there because they do not require you to secure the debt against anything.

However, unsecured loans have a major qualification in the form of a good credit rating. This is in contrast to secured loans such as. mortgages which require you to put something up as collateral or security. You got to have a healthy credit score before you can even consider getting a credit card with a decent interest rate. The solution comes, as ironic as it might sound, as a bad credit card. If your credit score is bad enough that you cannot get a good credit card anymore, there is a fix available for your situation. Why Bad Credit Cards? Bad credit cards are not bad per se or detrimental to your credit score.

Now, do not take the term the wrong way. In fact, they could be just the opposite when used correctly. As you might expect, they do not require much besides an application form. Bad credit cards are just called that way because they are specifically targeted for people who have bad credit histories or a bad credit rating. You can easily acquire a bad credit card and many banks and financial institutions offer them. That means you will have to make prompt and regular payments for your credit cards. The only drawback with bad credit cards is that they have a higher APR than the usual credit cards.

But besides saving yourself from the interest, there is another important reason for you to make prompt payments, as you will see later on in this article. Because they have few requirements, bad credit cards are the easiest( and perhaps the only) available option for you. Being Bad to Be Good. And getting one could hold the key to a better credit score. Pay a couple of utility bills, buy yourself an inexpensive outfit, just do anything to use up a little of the credit extended to you. Get yourself a bad credit card and then do some light spending on it. Then when the bills come, pay them as quickly as possible.

Repeat this process every month. Don not let the deadline dawn without your having paid your dues. What this does is it establishes you as a debtor who pays promptly. By using up just a little of your credit line, you make sure that the costs are still easily payable at the end of every month and that you do not get hurt by the higher- than- average APR. Your credit card company will notice the pattern and, so will other, pretty soon creditors. Using this technique would not improve your credit score overnight, that is for sure. If your loan- or debt- related needs are not immediate or very urgent, taking this course of action is well worth the effort for its benefits on your credit score.

You would not get any noticeable effects for about six months and it could take about a year for the paying pattern to nurse your credit rating back to health. That same credit score will be key in getting better terms on your next credit card or, just about any, indeed other method of debt consolidation available.

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