There have been reports that credit cards for consumers with a bad credit score have become more available as lenders begin to slowly offer more opportunities for borrowers in a subprime credit position to acquire sources of credit, which may be used for a variety of reasons. However, there are advisors that still warn cardholders against jumping into these credit card options quickly without proper research and reflection on their personal financial situation.
Numerous sources have stated that subprime credit card opportunities and, more specifically, balance transfer credit cards have begun to become more available for a variety of borrowers in the hopes of not only drawing more individuals back into the credit card arena, but there are some benefits to be had from these new opportunities for both good credit and bad credit borrowers. Obviously, many consumers have taken advantage of these new offers, like the balance transfer option that many lenders are making available, to consolidate bad credit debts or as a way to simply find a source of affordable credit while the low interest rate introductory period is being offered.
Using these cards can be helpful for bad credit borrowers as, again, they can offer a low interest rate for debt consolidation, which can be used to erase bad credit debts at a low cost. This area is where many counselors have advised cardholders to be cautious as simply qualifying for a credit card even when one is in a bad credit position does not necessarily mean that a consumer should open a new credit card account.
Again, there are benefits for consumers who may have a bad credit score through these new subprime credit card offers, but if debt relief is not a consumer’s primary goal when acquiring a new card, it could create a great deal of difficulty down the road. Obviously, consumers who may have a high amount of debt will unlikely be able to qualify for a credit card even if these subprime credit card options are available, but consumers who may have a manageable amount of debt which may have led to a poor credit score due to financial difficulties could still be problematic.
Ideally, bad credit borrowers will use new credit card offers, like balance transfer opportunities, to erase their debts by consolidating them onto one, low interest card and promptly paying off this debt before the introductory period expires and the credit card rate increases. Yet, bad credit borrowers who may want to acquire one of these new cards to repair their credit score must, again, make sure they have gotten out of debt which may be the source of their bad credit score, as simply buying and repaying credit to build a more positive history will obviously be much more difficult if current debts are already in place.
While there are reportedly more options for credit cards at the present time, bad credit borrowers must be cautious and review the terms of these new cards, look at their ability to repay charges made on new cards at the interest rate offered, and review their personal financial situation to make sure they are not hindering themselves by acquiring a new credit card when there is debt present in their life.