Credit Cards And Bad Credit

The combination of credit cards and bad credit in your past does not have to mean you will be forever denied a credit card in the future. It does, however, mean that it will be more difficult to obtain one, and anything you do get will not provide the luxuries you may once have been used to.

Credit cards for people with bad credit will usually have a very low credit limit, and you may even be asked to provide a deposit as surety. Some credit cards aimed at bad credit risks may bear a MasterCard or Visa logo, but will be little more than gift cards that require cash to be loaded onto them first.

For some people, credit cards and bad credit go hand in hand. These are the people who cannot stop spending even when they know they are creating trouble for themselves. Some of these people are serial offenders who may slowly fix their credit rating over time only to destroy it again when credit is once more extended in their direction.

How people become a bad credit risk:

There are numerous ways in which this can happen, but as far as credit cards go, there are a few no-nos if you want to avoid wrecking your credit rating.

• Late payments – When your statement arrives, you will have a certain amount of time to pay off the minimum amount that is requested. This is a small percentage of the total balance, and this is actually a demand rather than a request. If this is not paid in time, you will be considered in default on the debt and this is viewed very badly by your credit card provider, and is most detrimental to your credit rating.
• Full defaults – This is when you throw your hands in the air and declare yourself utterly unable to pay back the loan. The credit card provider will try and work out a solution with you, but they won’t be happy, and they will mark a naughty “X” in your credit history and send you to sit on the naughty credit step until you get your finances back in order. Bankruptcy doesn’t do you any favours, either.
• Being a “tart” – Great fun on the social scene, not so good in relation to credit cards. Credit card “tarts” may never make a late payment nor ever default on their loans, but they are still being watched. These people try to avoid ever settling a large debt in full by transferring debts from one introductory low rate offer to another. It can work for a while, but behind the scenes your credit rating is slowly dying a death and one fine day you will be refused any more lines of credit.

How to split credit cards and bad credit apart to achieve a better credit rating:

You will continue to have a problem with credit cards and bad credit if you do not call time on your bad habits, at least for while. To repair your credit rating may take as little as six months, but it will require some effort.

It is useful if you have credit problems to check your credit rating with a credit bureau or via a financial adviser. Then you will know exactly what work is required to make amends. You may even discover that there are errors in your file that are only exacerbating your problems. If your bad credit is of your own making, you will then need to start making your payments on time, start clearing your debts, and stop applying for new lines of credit in the hope that no one notices where you’re sitting (the naughty step). With bad credit already, every new credit application will count against you.

• Comparison of Top 10 Credit Card Offers

Editor's Choice: Our Top Credit Cards

Credit Card	Card Details	Interest Rate (p.a.)	Cash Advance Rate (p.a.)	Balance Transfer Rate (p.a.)	Annual fee	Interest free days (up to)
HSBC Credit Card	Editor's Choice: 0% for 6 months Balance Transfer & No Annual Fee Featuring a $0 annual fee for life, and 0% p.a. balance transfer for 6 months, the HSBC Credit Card was voted the Best Transactor Credit Card for 2010.	16.99%	20.75%	0% for 6 months	$0	55
Suncorp Clear Options Standard Visa Card	A great 12 month balance transfer offer, combined with a low annual fee and a good interest rate on purchases.	12.24%	17.99%	1.9% for 12 months	$39	0