How to Protect yourself From Bad Credit Cards
How to Protect yourself From Bad Credit Cards
If you’re in the market for a new credit card, you might be tempted to take the first offer that comes along. Some cards lure you in with promises of easy credit for those with poor credit scores or no credit history. These offers sound too good to be true, and they usually are. Here are some tips for protecting yourself from bad credit cards.
Most credit card offers are designed for people with good or excellent credit, which is why they come with low interest rates and good perks. Terms are stricter for sub-prime card holders. Because of the financial risk that banks take when they extend a line of credit to a sub-prime borrower, rates and fees are higher for these consumers.
But truly bad credit cards exist only to harvest fees. One example of a bad credit card is the Continental Finance MasterCard, which was chosen by Consumerist.Com as the worst credit card in the world in 2007. The card starts with a credit line of 0. However, it costs a whopping 7 to activate the card! Other traits of this bad credit card include monthly account maintenance fees, online payment fees, and a fee whenever the credit limit is increased. (Such increases come in increments.)
The Continental Finance MasterCard is only one example of the bad credit cards out there. Some give customers a paltry 0 credit limit. Others snatch fees and finance charges at every turn. These bad credit cards, which are marketed as a way to improve your credit score, aren’t worth the bother. You won’t do your credit score any favors by applying for a card that is automatically maxed out due to setup fees and monthly charges.
The only way to protect yourself from bad credit cards is to read every bit of the cardholder’s agreement before you sign up. Be sure to understand the associated fees and interest, the different rates of interest for different types of charges, and the payment process for your credit card.
Card companies are required to tell you about all the fees and possible penalties associated with your credit card. But they don’t always make this information easy to find. Read your agreement carefully, and call customer service if you have any questions about the card’s terms and conditions.
To make sure you don’t get stuck with a bad credit card, use BestCreditCardRatings.com to find the best deal on secured credit cards to build up your credit score.
This article is courtesy of BestCreditCardRatings.com, where you can compare Credit Card offers and apply for credit cards online.
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