Bad credit credit card: Do you know how the credit card companies rip you apart?

Cynthia Stewart
May 9, 2007
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Bad credit can happen to anyone. The reasons could be different but the result is the same. Credit card companies see bad credit people as a good means to fill up their coffers. Without paying attention to how the person got into this grim situation, they enforce their credit card issuing norms in such a way that they make maximum amount. How they rip us apart? Take a look at the following article and you will find the answer for sure.

High interest rates

A less than perfect credit repot attracts high APR on your credit card. Credit card companies simply can't digest the fact. The feel it risky to provide credit card, so to offset the risk high interest rates come in.

Low Credit limits

A very low credit limit is given if you have an unsecured bad credit credit card. On the other hand if you offer any collateral or link your credit card to a bank account, the credit limits can increase slightly. However, don't expect huge credit limits instantly, they can grow gradually if you are prompt on repayment and get the credit card companies faith.

High Annual fees

High ownership costs are a regular feature of bad credit credit card, this includes a high annual fees which can go in hundreds of dollars if the situation is really bad on the credit history front.

Low grace periods

With very less tolerance for defaults, credit card companies levy heavy late payment penalties and do not allow large grace period. Considering the fact that the borrower's credit history is already tainted, credit card companies feel that they have very little choice but to enforce strict repayment schedules to recover their money.

Advance Processing Fee

Yes, don't be surprised if a credit card company demands a huge sum in advance to give you that bad credit credit card. It has become a norm with some 'shady' credit card companies.

The facts above present the stark reality which faces a person with bad credit when he approaches a credit card company. To avoid getting ripped off by the credit card companies he/she should compare various bad credit credit card offers available in the market and choose only the one which suits best. A bad credit credit card is an opportunity to remedy the credit history. This can only be done if the monthly balances are repaid promptly and the credit card is used in a responsible manner.