When one is applying for a credit card or a loan, what do lenders and credit card company first look on? Of course they check on your income but that is not where their investigation starts. One’s credit history is what they check first. One’s credit history is the deciding factor whether a person is creditworthy or not. If you have a poor credit rating or history then you may likely be declined of your application? A poor credit history results from unpaid bills or regular late payments. People who never had a credit record will also have difficulty getting a credit card or a loan for the first time.
This could be frustrating to people who fall on these categories for the ownership of a credit card is now deemed to be a necessity by the majority. But this too would not mean that they can never have their powerful plastic. Credit cards especially designed for people with poor or no credit history can now see the light. There are instantly approved card for people who are trying to fix their credit score and establishing their credit history.
As they say, there is always a good and bad side to everything. Check out the advantages of using such cards:
These kinds of cards ( either secured or unsecured) are the best option to fix and build credit rating. Try to use only thirty percent of your credit limit monthly and make it a point to have it paid in full within the given grace period. By doing so, you are able to earn higher credit scores.
Such cards work the same way as the regular ones. You can make a hotel or ticket reservation with them as well. When emergency comes they too can be a lifesaver to you. Reading all these, you surely will be convinced that you need this card and you want to have one as soon as possible. Too good things could come with their own drawbacks though and here are some of them:
since the cards are made for costumers with high default risk, the interest rates are usually higher. An interest of up to 35% is charged to a customer; way way higher than the traditional credit cards.
Unsecured credit cards have a lower credit limit thus can not be used for big purchases. The bank though can give its customer higher credit limit after a period of six months to one year if payments were done religiously even without the cardholder requesting for it. Low credit limit with high interest rate, is this the kind of card you can manage? Better think twice.
Now if you opt for the unsecured cards to repair or establish your rating then you can have chances of losing your collateral especially when you are not able to manage to repay.
A lot of us think of credit card as an evil thing something that gives us a lot of burden. But the truth is that it is how we manage our cards which make life easy or even difficult for us. There is nothing better than training yourself with the proper and wise use of our credit cards.