As costs rise at the fuel pump and grocery store, people are searching high and low to get financial help. If their credit score is bad, they may have trouble finding a monetary life ring. When they do not qualify for bank loans, some people turn to payday loans, while others seek assistance from credit cards.
Discover, MasterCard, and Visa offer cards for consumers with low credit scores.
As first look, a credit card might seem like the answer to most financial woes. It allows the holder to make needed purchases and pay for these over time. However, the interest rate applied to credit card purchases is often high, especially if the cardholder does not have good credit history.
Someone with a credit score under 650 usually faces an interest rate of at least 20 percent.
A quick visit to the FTC Web site reveals several less expensive ways to borrow money. In the case of someone who needs to get back on track financially, lines of credit or loans may not be the answer. Experts often recommend establishing a monthly budget and saving cash to spend on needed items, rather than using a credit card.
Though this advice is out there, many people think a credit card is the only way for them to access money. They spend their adulthood digging themselves into credit card debt. Once they have gotten into this hole, it is usually difficult to get out because interest continues building.
The result can affect their lives well into the future.
Before making a major financial decision, a consumer should review all the options. When it comes to buying something, this means exploring different ways of borrowing money. Some alternatives feature lower interest rates than others.
Simply by doing their homework, consumers can save themselves some money.
How To Get A Credit Card Without Credit
A consumer catch-22 is how to build credit when you do not have any. People need credit for everything from a utility account to purchasing a home. In this weakened economy, consumers have become more dependent on credit cards, cash advances, and payday loans to make necessary purchases and pay their bills.
Those attempting to establish credit should take advantage of recent legislative changes and new credit card offerings. Having an empty slate in terms of credit history is worse than having bad credit. People with poor credit can restore their standing by making regular payments. Individuals without credit history offer financial institutions no way to judge their loan and bill repayment ability.
Credit card companies used to stake out college campuses, targeting students. The CARD Act of 2009 made proof of income or an adult co-signer for people under age 21 a requirement. Students do not find as many credit card issuers on campus now. However, they can find prepaid credit cards that do not require any credit history. These feature benefits like cash back and make issues like exceeding the credit limit or incurring late fees nonexistent.
Prior to applying for a prepaid card, make sure card activity will be reported to the credit bureaus. The Purple Diamond prepaid Visa RushCard from Bancorp Bank does but the Capital One reloadable prepaid MasterCard does not. There is an application fee for the Bancorp Bank card but the credit establishment feature justifies the cost.
Obtaining a co-signer guarantee is another way to get a credit card without credit. It could help with not only approval but also the amount and terms of credit. Careful spending is required because any late or missed payments will affect both the cardholder and the co-signer. Responsible use of a secured or co-signed card should open doors to additional credit.
