Credit Cards definitive guide.

You will find that once you have bad credit, offers for bad credit cards seem to come pouring in. You will receive them through the post and even through email. Companies will stop at nothing to get you to apply for their product. They purposely target those who are desperate and the unfortunate thing is that many people do turn to them for help.

Bad credit cards come with a high interest rate. It can be a lot higher than a standard card. The lender covers themselves with a high rate as you are a high risk borrower. You already have bad credit which means somewhere along the line you haven’t repaid what you owe on time. If they lend you money they are assuming that they may not get the money back when it is owed. Therefore you have to pay more for the privilege of getting the credit that you need.

The main thing that you have to watch out for is that applying for these bad credit credit cards can actually damage your credit rating.

How Credit Cards Can Damage Your Rating

When you make a credit card application, it gets recorded on your report if you are turned down. If you apply for more than one card and you get turned down for all of them then this can look really bad on your report. Future lenders will see it and notice that other creditors didn’t want to lend money to you. Therefore they will be more likely to turn you down too.

Even if you are accepted for a card it can still damage your rating. Many people end up with more than one bad credit card. They then spend up to the limit on each card and that can also have a negative impact on their credit rating.

Then there are terms and conditions that can push up the costs of the card. Lenders know that there are still many people who do not check the terms and conditions of a credit card before they sign up. If you don’t then you could end up facing high fees and spiralling debt.

Top Terms and Conditions to Watch Out For

There are several fees that you need to look out for with bad credit cards. The interest fees are already high enough without additional costs included. Over the limit fees are a good example. If you spend more than what is agreed on your account, you could face charges of up to £25. You would think that the card wouldn’t let you spend more than your limit but in many cases it does.

Another fee to be aware of is a late payment fee. This again can usually be around £25. These fees can really damage your finances and they will be recorded on your credit report. Bad credit cards are not always a good idea. They can make your situation worse and damage your credit rating. Therefore you should always think carefully before you apply for any bad credit cards.