Instant Decision Credit Cards– A quick fix for bad credit?
Personal_Finance / Credit Cards & Scoring Apr 30, 2008 - 01:28 AM GMTBy: Mike_Gracia
Many people are now aware that opening a new credit card and running the account well is one of the best ways of improving one's credit rating. Those with bad credit that are expecting to get one of the instant decision credit cards however, may be a tad disappointed.
One of the problems with having a bad credit history, or even just a low credit score due to never really having credit (If that's possible these days!), is that most lenders will not simply approve your application instantly. Indeed, they may be considered unethical lenders if they did this.
Instead, you can expect to wait around 7 to 14 days for a response to an application for one of the credit cards for bad credit . (This does vary hugely with different companies however).
Once (or if) you are accepted, be sure to use the card very wisely…
As a bad credit risk, you will have to suffer a much higher rate of interest on your credit card . Often bad credit cards carry an interest rate of around 30 percent. Be sensible; USE the card to help yourself get a better credit rating, this will not happen if you get caught behind in payments again!
The way to get the best benefit from these cards is to pay off the balance EVERY month in FULL… That way, you should escape the excessive interest charges.
If you can manage to do this for a few months, you may well find your credit score increases enough to try for a standard credit card, or possibly even an interest free credit card (Please do remember, however, that applying for too much credit in a short time frame could possible look bad in itself, so maybe wait until you are confident that your credit score has improved sufficiently before applying for a better credit card, and if you get turned down by one company wait a good while before trying anyone else).
If you are unsure which credit card is best for you, then why not compare credit cards using an online service. If you speak on the phone to any debt agencies, or debt help centres about credit cards or loans, be sure to find out if they are going to search your credit file with the credit reference agencies.
Remember, once your credit is higher, and you have a low interest rate credit card (or even a 0 interest credit card ), it would perhaps be a good idea to transfer any balance off the higher interest credit card.
If you are scared that you may run up even more bad debt, but still want the benefit of having a credit card, why not consider one of the pre paid credit cards ? – These are also handy if your credit score is so low you can't get a normal credit card account at all.
By Mike Gracia
http://www.creditchoices.co.uk
© 2007-2008 Copyright Mike Gracia / CreditChoices.co.uk. - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.
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