As we enter into the third week of September cardholders are still in a position where bad credit could limit the opportunities for credit cards, particularly when a bad credit borrower may be looking for a card as a way to improve their credit score but there are some men and women who are simply looking for a line of credit for other reasons as well. However, we have seen rates on secured credit cards remain relatively unchanged over the past few weeks, and as we near the end of the month there are still consumers who are seeing rates on these cards that may potentially be unaffordable if some form of collateral is not offered, which is usually the case with one of these secured cards.
Some men and women may find that they can get a secured credit card or an unsecured card for a bad credit borrower at a rate of anywhere from 19% to 24%, but again these rates can vary depending on the financial position of a potential borrower. If an individual has a solid income, a low amount of debt, and may have a positive credit history up until instances that may have arisen which contributed to their low credit score, some lenders may see them as a safer risk and offer a lower rate on a secured credit card or cards available for consumers with a low credit score.
Throughout the year the credit card debt that consumers have in place has gone up and down as we’ve seen periods where consumers have paid down their debt, while other times have led consumers to rely more heavily on credit card purchases for a variety of reasons. Yet, consumers who are looking for the secured cards need to be very careful about the costs they will have to meet, particularly if a balance is to be carried.
As with unsecured credit cards, there are consumers who make the mistake of thinking that just because they may be able to meet minimum payments on either an unsecured line of credit that is offered for bad credit borrowers or these secured credit cards for those with a low credit score, that they are in a position where carrying a balance even with a high interest rate is okay. Just paying a minimum credit card payment can be a problem for consumers, particularly if a financial emergency were to arise, as any type of credit card debt that comes with a high interest rate, no matter the minimum payments, will not be in a consumer’s best financial interests because they will spend more in the long run.
However, if consumers here in September are looking for secured credit cards or lines of credit available for bad credit borrowers that may be offered, it may benefit these individuals to not only look at various offers, which may come from major banks or even a local bank or credit union, as consumers are typically going to see higher rates when poor credit is involved, even if they do offer collateral like that which is usually required for a secured card. Yet, some financial advisers go further and caution borrowers against carrying a balance on these bad credit credit cards, due to the fact that consumers could be using funds to pay down other areas of debt or save in case an emergency arises, while still making charges and paying off their secured credit card debt in full, which can be beneficial when it comes to improving their credit rating.