What are the Downsides of Applying for and Using Unsecured Credit Cards?

What are the Downsides of Applying for and Using Unsecured Credit Cards?

In this presentation, we’ll examine the drawbacks of taking out and managing unsecured credit cards for bad credit and how you, as prospective cardholders, can eectively deal with them.

They usually carry high interest rates.

Unsecured credit cards for bad credit usually come with higher rates of interest than their secured counterparts. However, lines of credit extended to consumers with poor credit standing tend to carry the highest interest rates. After all, card issuers use this feature to compensate for the great risk involved in offering credit cards to individuals with histories of payment delinquency, tax liens, and bankruptcy.

Still, you can improve your chances of finding an affordable card account if you will take the time to shop and compare what each issuer offers. Look very closely at the rates of interest and fees. And don’t forget to inquire about the other features of each card program, particularly the payment terms and options, the credit limit, and of course the eligibility requirements. In so doing, you will most likely end up with an unsecured credit card that matches your needs, spending habits, and budget.

Issuers of bad credit-credit cards are somewhat hard to find.

Since there’s a great risk involved in extending lines of credit to consumers with bad credit history, more and more companies today are dealing exclusively with people who have good-to-excellent credit scores.

Nevertheless, there are steps you can take to find issuers of bad credit-credit accounts. For instance, you can request for referrals from your close friends, relatives and colleagues, especially from those who have just applied for unsecured credit cards for bad credit. You may also use reliable search engines so that you can locate online credit organizations. By employing these tips, we believe that you can boost your likelihood of finding a credit card firm that can give you what you want, despite your poor credit standing.

You might find it very difficult to convince card issuers to approve your request for a line of credit, especially if you have a very low credit score.

Still there are techniques you can employ to improve your chances of scoring an affordable deal. For instance, you can approach a family member or a close friend who has a high credit score and convince him or her to co-sign your application for unsecured credit cards for bad credit. After all, the excellent credit standing of your close friend or relative can compensate for your less than perfect credit score. In fact, it can pull up your credit rating and thus boost your likelihood of being granted the credit card you need.

You may also decide to clean up your annual credit report. Order copies of your credit file and find time to review the transactions listed on it. Always remember that a single error in your credit and payment transactions can inflict further damage to your credit history and drive way prospective card issuers.

So by taking the time to go over the items on your report you can immediately catch negative entries which might get in your way of qualifying for an unsecured credit card. And if you will dispute such items with the three major credit bureaus, you can look forward to receiving an updated report that you can use in applying for the line of credit you wish to take out.