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.