Use A Bad Credit Credit Card To Repair Past Disasters

By: Jon Francis

Use a credit card to get you out of the mess caused by credit cards? If you're trying to repair a damaged credit history, bad credit credit cards may hold part of the key. The trick is all in choosing the right option and using it wisely.

Your credit report is a listing of all sorts of information about you, including when and how you pay your bills, if you've got overdue accounts, if you have a history of defaulting on loans and if it's safe to trust you with borrowed money. On the flip side, it also can show that you handle money responsibly, that you've paid off debts and that you are a fine upstanding citizen who pays accounts off on time and properly. Bad credit credit cards can help you change the image that your credit report reflects - as long as you actually use them appropriately.

Why a bad credit credit card? Obviously, if you qualify for a low interest option, you wouldn't need to be reading this, would you? If you've had trouble applying from most lenders, though, there are options designed for people with spotty, stained or downright tattered credit. In some cases, you may have to go so far as applying for a secured credit card - where you deposit 1-2 times the amount of your credit limit into a bank account as collateral - in order to get a card that you can use - but the results are worth it. Here's why.

One feature that most bad credit options share is their reporting habits. Most credit companies only make reports to the credit bureaus when you miss payments or are late on them. Credit cards that are marketed as 'credit repair' cards, on the other hand, often report every payment that you make, and label your account 'in good standing'.

This is important if you've had credit troubles in the past. While many infringments will stay on your credit record for up to six years, the further in the past they are, the less they'll count with prospective creditors. If you had a bad spot of trouble four years back, but your credit report now shows two years of regular, on time payments to a credit card company, the picture that emerges is of a regular person who had a tough time, but has since recovered and is paying their bills on time. That's even better an outlook than a person who had a spot of trouble four years ago, and hasn't used credit since.

Obviously, you'll pay a bit more for your credit card than if you had spotless credit. Bad credit issuers are taking a bigger risk by giving credit cards to those who have had trouble in the past. To offset that risk, they'll charge higher interest rates, and quite possibly membership fees and service charges. That doesn't mean, though, that you're stuck paying a fortune in unreasonable fees and rates.

If you shop carefully, you'll find companies that aren't taking advantage of your vulnerability by tacking on outrageous fees. You can compare various options online where you'll find a full selection of the best offers available in the UK today.

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