Credit Cards for People with Poor Credit Ratings

Credit Cards for People with Poor Credit Ratings

A lot of people with poor credit ratings often do not bother applying for a credit card at all since they assume that their credit history disqualifies them from ever being approved for a credit card. This is definitely untrue, since there are credit cards in the market that will approve even those with poor credit ratings. In fact, some credit cards even consider people with poor credit histories to be one of their target markets.

Credit card companies that offer cards for those with poor credit ratings do so not out of stupidity. Obviously, they know that there is a much greater risk associated with extending credit to these people. To offset this risk, and ensure that they can still make a profit despite the relatively greater number of cardholders who will default on their loans, they charge really high interest rates one their cards. What this means then for credit card applicants is that at least they are almost guaranteed to be approved despite their credit history, but are also guaranteed to get high interest rates.

For most people who have just gotten out of debt, the high interest rates are an automatic turn off. They assume these credit cards will do them no good and will just land them back in debt, thus even worsening the credit ratings.

While this assumption is true if you haven't learned your lesson, and are getting a credit card solely to get access to credit again and increase your purchasing power, it does not hold true in all cases. In fact, it is quite the opposite if you have learned your lesson and plan on getting a new card to help pull up your credit ratings back to an acceptable level. By getting a new card and using it wisely this time, even if the credit card rates are pretty steep, you can slowly build your credit history.

This does not mean though that you should automatically settle for the first card you think will approve your application. Instead, shop for cards online and compare credit cards, not based on the interest rates they can offer you, but on the other perks the cards can provide. If you will be paying high interest rates on card purchases, at least you should get a card that has a good rewards programme, a decent online credit card service, and satisfactory customer service.

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