If the U.S. debt ceiling is not raised, Fitch, Moody’s, and Standard & Poor’s will likely downgrade the nation from its prized Triple-A credit rating. This move could impact Americans for generations in terms of borrowing costs.
Interest rates on mortgages, loans, and credit cards may increase. In this depressed economy, credit has become a means of survival for many Americans.
Mortgages have become foreclosures and loans are few and far between. This leaves us to rely on credit cards to meet our financial needs. As the importance of these pieces of plastic increases, so should the amount of research we put into finding a good one. Many credit card options exist, so even those with poor credit should be able to secure an account.
Card issuers typically make their approval decision based on the earnings potential, financial history, and credit score of the applicant. The typical card is unsecured and even individuals with bad credit may be able to find one of these.
However, a higher APR for purchases and cash advances and more costly fees are usually imposed on individuals who are considered a credit risk.
Anyone who has trouble finding an unsecured card should explore deposit-secured, no-credit, and prepaid credit card offerings. No-credit versions are difficult to find and carry high rates of interest. They differ from standard cards mainly in the amount of credit extended.
Prepaid cards are funded in full before the card is used, making them convenient but extending no credit.
The outcome of the federal debt ceiling discussion is still unknown and its impact could be widespread. Just because the government seems to be unable to control its spending does not mean that we as consumers must follow.
We can find a credit card designed to maintain or improve our credit rating through responsible spending.
