High mortgage, insurance, and auto loan premiums are also wrongly applied to those with poor credit records. Furthermore, they have trouble obtaining credit card approval. The condition can become incredibly aggravating. I sometimes receive emails from customers seeking advice about how to repair their credit. The first thing I advise them to do is get a credit card customized for individuals with poor credit. The second point I say to them is bolded: Under THE FINE PRINT CAREFULLY.
There are only a few credit cards available for those with poor credit. Some seem to be the same at first sight. By reporting to the main credit bureaus every month, they all assist with the building and rebuilding of the credit. They all give you a Visa or Mastercard that you can use to make a variety of transactions. They’re all both acceptable evils that will save you thousands of dollars in potential mortgage and car loan costs. However, when applying for one of these credit cards, be sure to read the fine print, since they often charge heavy annual, set-up, and even monthly fees. In this article, I’ll look at a few cases of charges buried in the fine print of new “poor credit” credit cards. Just one of the three big cards I’ll look at stands out as consumer-friendly.
Credit Card for “Bad Credit” #1: This credit card has a very low-interest rate for an unsecured credit card. However, a glance at the fine print shows a one-time setup fee of $29. Not that shabby. So far, the next payment is a $95.00 one-time fee. So far, we’ve racked up a total of $124 in expenditures. Isn’t that the end of it? No, it’s not true. Add $48 for the annual charge and $6 per month for account management costs to the total. The cost of your new credit card will be $244 for the first year and $120 for each subsequent year. This is a significant difference, and a card like this can only be used if you are unable to get a better-unsecured credit card with poor credit.
“Bad Credit” Credit Card #2: For an unsecured credit card, this credit card has a very high-interest rate. This can’t be healthy. The setup fee, though, is just $29. Maybe this card is not quite as bad as that seems. There’s still a $6.50 annual maintenance charge, bringing the total amount of this unsecured credit card to $107. Perhaps we’ve stumbled across a steal. That’s not the case. The annual fee is astronomically high at $150. Yes, per year for $150. Not only does this raise the total expense to $257, but you’ll now have to spend $228 a year to keep the credit card active. There should be a better option open.
“Bad Credit” Credit Card #3: Depending on the issuer’s analysis of the credit records, this credit card is available as both a protected and unsecured credit card. The rate of interest is average, if not competitive. There is a one-time setup fee, according to the fine print. This fee, depending on your credit, maybe as little as $0 or as high as $49. So far, things are looking up, particularly if your credit isn’t too bad. However, there must be a significant annual charge. No, not at all. A secured credit card has a $35 monthly charge, whereas an unsecured credit card may have a fee as low as $39 or as high as $79. The price of this card so far has ranged from $35 to $128. The monthly maintenance bill is now due. This will be a massive event. Or maybe not. It’s a buck. That means the most you will be paying with this credit card is $128, which is less than half of what rival cards charge.
There are benefits especially between “poor credit” and “good credit” credit cards. Just one of the three deals we looked into doesn’t take you to the cleaners. In reality, the “bad credit” credit card #3 is a fantastic deal. Good improvements to your financial report and credit score will result in lower debt rates, credit card interest rates, insurance rates, and, in the end, thousands of dollars in savings. The road to credit repair is not without its costs, but in the long run, repairing your credit with a “bad credit” credit card is the quickest and most cost-effective way to repair the sometimes unforeseen conditions that caused your credit to be compromised in the first place.
Also Read: What is Credit Card?