Credit cards for borrowers with bad credit offer certain opportunities for those who may be in a financial position when they have either seen a decrease in their credit score for one reason or another, or in cases where a consumer is in a position where they simply may not have much of a credit history, and therefore may be viewed unfavorably by certain lenders, there are some who question whether these unsecured credit cards that may be available for borrowers with less than perfect credit will be beneficial for various purposes.
Essentially, the question over whether a bad credit credit card is helpful surrounds interest rates that a consumer may have to deal with if they happen to use their card often or carry a balance. While credit rating websites like CreditCards.com stated that, as of this report, average APR’s for bad credit credit cards were around 23.95% and Bankrate.com lists some cards for bad credit borrowers that may have an interest rate around 22% or 23%, most consumers understand that the rate they get will depend on their personal financial situation.
Yet, consumers must also realize that some cards for bad credit borrowers may come with a variable interest rate and this could be problematic, especially if a consumer uses their card often or, again, carries a balance and sees their rate increase, but also, the fact that most bad credit credit cards simply come at a higher rate due to a cardholder’s financial position often puts consumers in a difficult situation when meeting costs related to charges and interest. However, consumers may be able to benefit from an unsecured bad credit credit card simply because smart financial practices and budgeting habits can help consumers avoid excessive costs that may be related to a high interest unsecured line of credit for bad credit borrowers.
Consumers who are in a position where they are using an unsecured bad credit credit card may be able to improve their credit history as a result, as there are some consumers who are in a position to acquire these types of cards and may avoid bad credit repair cards like a secured card as a result of being in a specific financial position. Obviously, consumers need to make sure they research these credit card offers, as some lenders may charge excessive fees along with a high interest rate, but for those who are using credit cards simply for bad credit repair, either an unsecured or secured credit card could be helpful if the right practices are implemented.
Keep in mind, even if a consumer is simply in need of a bad credit credit card for reasons beyond bad credit repair, attempting to keep the credit card balance low and paying off charges in full will lead to more affordability over time since a consumer will not be paying as much in interest. However, with numerous credit card offers that may require no credit check or are available specifically for consumers with a bad credit score, consumers must be on guard against these cards as there could be excessive fees, high interest rates, or other requirements that may make this type of credit unhelpful for an individual in a bad credit position.