Having a bad credit score as a result of not making good financial decisions and having a low credit score due to the fact that a consumer may have had little credit history or activity in their lives are two entirely different situations that often can be corrected with similar financial actions. Yet, here in early July consumers will need to take note any changes that may have taken place in the rates of certain cards that may be available to those with a low credit score, as there could be different options for consumers looking to boost their credit rating at the present time.
The issue of bad or poor credit is an ongoing topic which can be talked about at length due to the many aspects and the intricacies that make up a bad credit borrower’s situation. It’s common sense that one bad credit consumer’s situation will be different from another, but today as we focus specifically on cards and rates for those who are looking to begin the process of establishing a credit score, there are also nuances that must be taken into account.
When it comes to credit card rates, there are few changes that have been seen recently as secured card rates have stayed around the 24% range and general average rates on variable cards are reported to be around 14%. Secured cards are usually the option that bad credit borrowers turn to as they are typically more available for bad credit borrowers and can come at a lower rate than some unsecured cards that are also available for consumers, yet these cards can also be used for simply establishing a good credit score and can also be used by consumers as a “training card” so that proper credit practices can be implemented.
Consumers who are new to secured credit cards should know that collateral must be offered before a line of credit can be established for a secured card and there are interest rate costs that will be paid if a balance is kept on the card, but fees are also something that consumers must look out for no matter if they are looking for an unsecured or secured card. Yet, secured cards for borrowers with a low credit score may not be the only option, particularly if a consumer’s low score is the result of having little credit history.
There are some lenders who may be willing to offer an unsecured credit card to some borrowers that may want to start the process of improving their low score and building a credit history. Establishing a credit history and reestablishing a credit history can be viewed in different ways by credit card lenders as a consumer who may have a sufficient income in relation to a card’s line of credit could be viewed more unfavorably as they could have a track record of mismanaging their debts. On the other hand, some consumers with no credit history may be offered an unsecured card at a lower rate that they would get with a secured card, but again this depends on the lender.
What men and women in need of a credit card for the purposes of building a credit score must remember is there are things to watch out for when comparing credit cards. Cardholders who are new to credit card use may want to beware of fees, low intro offers that may increase later, or perks that come with a card that could be of little use. Many low credit consumers simply focus on getting a card with an affordable rate and then making purchases that can be quickly paid off each month, and this has in many cases been helpful for increasing a consumer’s score and offering more affordability in other areas where interest rates are a factor.