Credit Cards for Bad Credit
Can you still get credit cards even if you have bad credit or poor credit? What is in a credit score anyway? Apparently, there are indeed credit cards for bad credit, or people just starting again on the path of creditworthiness after Bankruptcy, Debt Consolidation or Debt Settlement. The fees will be higher, and so will the interest rates, of course. Check out specialty banks and companies that issue credit cards for bad credit.
Risks of Having Too Many Credit Cards
There’s a right number of credit cards to have and it varies from person to person. Having too many cards can affect your credit score, but the specific number remains a secret. It’s up to you to manage the number of cards you have and keep your cards to a minimum. Having too many credit cards is a bad thing and here’s why.
It can affect your credit score.
We’ve already mentioned that having too many credit cards can hurt your credit score. The problem is that we don’t know just how many cards you can have before your score starts to suffer. So, it’s up to you to keep them to a minimum. You can’t necessarily close a card because you think you have too many; that could hurt your score, too. The key it to consider how many you have before you apply for a new one.
You could create too much debt.
The more credit cards you have, the easier it is to run up credit card balances that you can’t afford to repay. No one expects to create excessive debt, but when you have the credit available and ready to use when you don’t have cash available and ready to use, it’s easy to just swipe your credit card. Keep your cards to a minimum to remove the temptation of running up a high balance.
It’s harder to manage your credit card payments.
The more credit cards you have, the more payment dates and payment amounts you have to keep up with. If you have just one or two cards, you’ll only have to make that many payments each month. If you have several cards, you can better keep up with them all by creating a list of the cards, their balances, the due date, and the minimum monthly payment on each.
You may not get approved for a mortgage.
If you’re going to be applying for a mortgage soon, you’ll definitely need to take inventory of your credit cards. Even those without a balance can keep you from getting approved for the mortgage. That’s because mortgage lenders not only consider the amount of debt you have, but the also the amount you could have if you charged up your credit limits.
You may not get approved for a new card.
If you apply for a credit card when you have too many cards, your application could be denied. You may not find out on the spot that the reason is that you have too many cards, but you’ll learn later. Card issuers are required to send you a letter when your application was denied letting you know why you were turned down. It’s for the best that you don’t get another one. If you already have more than you can handle, putting another one in the mix will only lead to disaster.
This article was written by Steve Dowell. Steve has a financial education and ample background in personal finance. Check out applyforacreditcard.com for more related articles.
Here is another article that will help you sort out credit cards for bad credit and credit cards that are still after old and retired debts.
Sued for Old Credit Card Debt? Don’t Make A Payment!
I have to say that I’m excited by the actions that some of the Attorney Generals in this country are taking. Right now in Washington State Rob McKenna is going after a subsidiary of Bank of America and Gary King in New Mexico just announced a new rule for time-barred debts. It stands to reason that other states will follow suit and this is a HUGE VICTORY against the junk debt collectors that feed off consumers who do not realize that their old debt is beyond the statute of limitations.
Here’s the deal with consumer credit card debt. It has a statute of limitations. This means that after so many years (it varies by state, average seems to be about six years but in some states is as little as 3)a debt collector may continue to pursue collection efforts but cannot sue you in a court of law.
Well, entire armies of debt collectors have been getting rich using the court system for YEARS! They issue a Complaint or Lawsuit against a debtor who has old debt. Most of the time this debt has been sold and resold to various debt collectors and is bought for pennies on the dollar. The original issuing creditor has long since written off the debt, thus relieving their tax burden.
The debtor receives a summons from the court to appear in the lawsuit. At this point they have three options. They can hire a lawyer to defend themselves, they can respond Pro Se (without an attorney) and defend themselves or most commonly they panic and do nothing.
A summons generally must be responded to in what is called an “Answer” within 20 days or a default judgment is granted. This is what happens in over 95% of credit card debt lawsuits.
No one responds to the lawsuit, the lawyer doesn’t even have to be in the courtroom (most of these cases are handled by mail) and a default judgment is granted and the debtor now has a judgment on their credit report and the collector has the legal means to garnish their wages or freeze bank accounts until their judgment is paid in full AND legal fees, interest and penalties are tacked on to the original amount owing.
Default judgments should NOT happen. The worst case scenario for most of these cases should be a settlement at a reduced amount.
The exciting thing about this victory in New Mexico is that a new rule has been enacted by the Attorney General that will require debt collectors to inform debtors that their debt is time-barred and past the SOL by telephone AND in writing.
Plus it will force them to INFORM the debtor that if they make a payment it will RE-START the SOL CLOCK. That’s right. I’ve seen $20 payments on debt that was well past the SOL (10 years or more) totally sabotage people’s efforts to defend themselves in court. One payment no matter how small starts the clock back to zero.
Of course, we all know the debt collectors will try to find sneaky ways around this new ruling BUT it’s a huge step forward and I sincerely hope other states follow suit. It’s so important to remain vigilant when dealing with debt collectors. For more information on defending yourself in a credit card debt lawsuit (Pro Se) please visit my website at http://www.HowToAnsweraCreditCardDebtLawsuit.com
Jay Johnson fought and won a $5K credit card debt lawsuit. He penned “How to Answer A Credit Card Debt Lawsuit and Win!’. For more information about defending yourself in a credit card debt lawsuit, you can visit his website at http://www.IHaveBeenServed.com
Credit cards for bad credit, if managed properly, may help you raise your credit score. Here is an article that sheds light on this opportunity.
Can Tribute Credit Cards Really Help Save Your Declining Credit Score?
Tribute cards are the most popular of the easy unsecured credit cards. They are usually issued to people with bad or no credit who are looking to establish or improve their credit rating.
If you are faced with declining credit score, you may slowly rebuild your credit reputation by making monthly payment of your tribute cards on time. However, you have to be aware that when you miss your payments, you will increase your already high interest rate. By then, it will be very difficult for you to get the rate back down again. So you have to be very careful to pay off your bills promptly to avoid paying a lot more for the purchases you make. If you pay only a part of the amount you owe, high interest rates will be applied to any unpaid outstanding balance.
There are other important information you need to know about these easy unsecured credit cards. Take a look at the information that follow.
- Tribute cards have very low initial credit limit. This means that you will be able to make small purchases only. This may not be very helpful if your purchase requirements involve large amounts. If you want to make large purchases, you better use prepaid debit cards. By this, you avoid being trapped in mounting unpaid credits again.
- Tribute cards charge annual fees. Every year, you pay the bank for the “privilege” of being extended with the credit. Take a look at the rate and evaluate if the fees are not onerous to you.
- Tribute cards carry some amount of charges for monthly maintenance fee. Again, you have to weigh your capability to pay the fees on top of your credit purchases.
- The card company may not tell you upfront that the annual fee (for your first year) and the monthly maintenance fee (for the first month) are charged to your initial credit limit. This means that at the onset, tribute cards may not actually meet your credit requirements.
Tribute credit cards are no different from most unsecured credit cards. In general, secured credit cards are better. There are no annual fees to pay and they normally do not charge monthly maintenance fees as tribute cards do. Interest rates for secured cards are usually lower. You will end up saving thousands of dollars in five years for the amounts you save in annual and monthly fees.
Just like any credit card offer, make sure you read the fine print. Pay attention to interest rates, over the limit fee, late fee and cash advances. Credit cards for bad credit will have higher rates, so evaluate if it’s worth having the card.
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