When you are deeply rooted in bad credit conditions and find no way out, hen subprime credit cards are readily available for you to work upon your credit scores. Since, with a bad credit history cannot ensure you an approval from a mail-in offer, there are many other solutions available on the web.
Subprime credit cards
Even, if you are having a bad credit score, the fact is that at one point or another you will need to have a credit card for either general survival or for an emergency situation. Although, subprime credit cards might not seem to be appealing at the beginning however, for many people these cards serves as the only option left. Actually, if these cards are used with a regulated spending habit, then they can be very helpful in improving your credit record overtime.
The base of calculating credit scores of a cardholder mainly depends upon the lending habit of the person. Since subprime credit cards offer access to cash, they can be immensely helpful in improving credit scores. Moreover, by using the card wisely, you can show the lenders that you are in a better position to manage your financial position as you were in the past.
Why opt for subprime credit cards?
Now when you have a bad credit record, obtaining an unsecured credit card can be very tough. Banks and financial institutions will not lend you a card easily so these cards are the only option available. This, as a matter of fact, does not mean that your interest rates should reach the skies. Typical interest rates charged are about 14%. There may be companies which provide cards with higher interest rates but, they will reduce these rates once you prove that you are using the card wisely.
While improving bad credit scores is considered to be the greatest advantage of subprime credit cards, there are some disadvantages associated with the card as well. The first demerit is that these cards can be very costly. The interest charges are higher since the person using it is at a higher risk o defaulting with the card. In addition to this, the fees of these cards are also higher. Only the annual fees can range from $25 - $79. Moreover, additional fees include account opening fees, programming fees as well as monthly servicing fees. All these charges are deducted from the credit limit prior to issuing the card to the customer. Having all these fees deducted, the initial amount provided for spending is very low. For this reason, comparing subprime credit cards of different companies is recommended so that the rates, terms and conditions can be understood and matched with your needs and requirements.
If you are willing to repair you damaged credit history, then subprime credit cards can be your helping hand. Although, most of the spending amount will be absorbed by the charges, you will still be clearing payments on a monthly basis which will help in improving your credit ratings overtime.