Individuals with problematic credit histories often suffer unfairly from high mortgage, insurance, and car loan rates. On top of that, they have difficulty getting approved for credit cards. The whole situation can get extremely frustrating. Frequently, I get emails from consumers wondering what they can do to rebuild their credit. The first thing I tell them is to get a credit card designed for people with bad credit. The second thing I tell them is written in bold: READ THE FINE PRINT.
There are only a limited number of credit cards for individuals with bad credit. At first glance, many look the same. They all help build and rebuild your credit by reporting to the major credit bureaus on a monthly basis. They all provide you with the Visa or Mastercard you need to make many purchases. And they are all necessary evils that can save you thousands of dollars in mortgage and car loan rates in the future. However, you must read the fine print before applying for one of these credit cards, as they often charge high yearly fees, set-up fees, and even monthly fees. Here, I will examine a few examples of charges current "bad credit" credit cards bury in the fine print. Of the three major cards I will examine, only one stands out as consumer-friendly.
It is our opinion that our customers are seeking large credit lines and don't want to be mislead into thinking they can have something when in fact they cannot. We feel that it is important for our customers to make educated decisions. We will never sugar coat our recommendations, we will give you our recommendations and provide you with other options that are available, we will then explain those options and what type of results you can expect from them. With us you will always have the ability to make an educated decision. We will not let you make an uneducated decision that can cause permanent harm to your companies long term goals.
Once your credit report is accurate, you'll want to raise your score as high as possible so you can get the best interest rates and other credit terms. First of all, there are some things you don't want to do if you're aiming to fix your credit score. The most important thing not to do is pay your bills late. Late payments, especially those over 90 days, are disastrous to your credit score, so avoid them at all costs. In fact, your credit history is the most influential component of your credit score. It should go without saying, but keep accounts out of collection. Collection actions can follow you around for 7 years, and obviously have a negative impact on your credit score. Your credit score is views recent credit history more heavily than your activity farther in your past, so if you've had a few fairly recent late payments, simply waiting for a year or so while continuing to pay your bills on time will raise your score too. After the late payments are approximately 24 months behind you, they will not have the same impact on your score.
"Bad Credit" Credit Card #3: This credit card is available as both a secured and unsecured credit card, based on the issuer's review of your credit history. The interest rate is average, even competitive. Now, the fine print reveals that there is a one time setup fee. However, based on your credit, this fee can be as low as $0 or as high as $49. So far so good, especially if your credit is not that bad. But, there must be a huge annual fee. Not exactly. The annual fee for a secured credit card is only $35, and for an unsecured credit card, this fee can be as low as $39 or up to $79. So far, the cost of this card ranges from $35 to $128. Now its time for the monthly maintenance fee. This one has to be huge. Or not. Its $0. That means the most you could possible be charged to obtain this credit card is $128, about half of what competing cards are charging.
We also found several companies claiming to be partnered with the IRS, This seems like an endorsement but if you did a little research you will find that the IRS does have a partnership program. This "partnership" program allows the partner to link to tax educational articles on the IRS website. Yes this is a partnership but it is NOT an IRS endorsement in any way, shape or form which several of these companies seem to imply. They are betting on you being naive and not checking. To me this is misrepresentation and fraud.
There are only a limited number of credit cards for individuals with bad credit. At first glance, many look the same. They all help build and rebuild your credit by reporting to the major credit bureaus on a monthly basis. They all provide you with the Visa or Mastercard you need to make many purchases. And they are all necessary evils that can save you thousands of dollars in mortgage and car loan rates in the future. However, you must read the fine print before applying for one of these credit cards, as they often charge high yearly fees, set-up fees, and even monthly fees. Here, I will examine a few examples of charges current "bad credit" credit cards bury in the fine print. Of the three major cards I will examine, only one stands out as consumer-friendly.
It is our opinion that our customers are seeking large credit lines and don't want to be mislead into thinking they can have something when in fact they cannot. We feel that it is important for our customers to make educated decisions. We will never sugar coat our recommendations, we will give you our recommendations and provide you with other options that are available, we will then explain those options and what type of results you can expect from them. With us you will always have the ability to make an educated decision. We will not let you make an uneducated decision that can cause permanent harm to your companies long term goals.
Once your credit report is accurate, you'll want to raise your score as high as possible so you can get the best interest rates and other credit terms. First of all, there are some things you don't want to do if you're aiming to fix your credit score. The most important thing not to do is pay your bills late. Late payments, especially those over 90 days, are disastrous to your credit score, so avoid them at all costs. In fact, your credit history is the most influential component of your credit score. It should go without saying, but keep accounts out of collection. Collection actions can follow you around for 7 years, and obviously have a negative impact on your credit score. Your credit score is views recent credit history more heavily than your activity farther in your past, so if you've had a few fairly recent late payments, simply waiting for a year or so while continuing to pay your bills on time will raise your score too. After the late payments are approximately 24 months behind you, they will not have the same impact on your score.
"Bad Credit" Credit Card #3: This credit card is available as both a secured and unsecured credit card, based on the issuer's review of your credit history. The interest rate is average, even competitive. Now, the fine print reveals that there is a one time setup fee. However, based on your credit, this fee can be as low as $0 or as high as $49. So far so good, especially if your credit is not that bad. But, there must be a huge annual fee. Not exactly. The annual fee for a secured credit card is only $35, and for an unsecured credit card, this fee can be as low as $39 or up to $79. So far, the cost of this card ranges from $35 to $128. Now its time for the monthly maintenance fee. This one has to be huge. Or not. Its $0. That means the most you could possible be charged to obtain this credit card is $128, about half of what competing cards are charging.
We also found several companies claiming to be partnered with the IRS, This seems like an endorsement but if you did a little research you will find that the IRS does have a partnership program. This "partnership" program allows the partner to link to tax educational articles on the IRS website. Yes this is a partnership but it is NOT an IRS endorsement in any way, shape or form which several of these companies seem to imply. They are betting on you being naive and not checking. To me this is misrepresentation and fraud.
About the Author:
Frank Miller has a Debt Consolidation Blog & Finance, these are some of the articles: Interested In Forex Trading? Here Are Some Helpful Tips! You have full permission to reprint this article provided this box is kept unchanged.
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