Poor Credit History Credit Cards

How to use a poor credit history credit card...

Many people - often through no fault of their own - can lumber themselves with a poor credit score. It is a hindrance that is all too easy to pick up, but difficult to shift.

Poor credit history credit cards are a great way to rebuild a poor financial history. They are easier to get accepted for than a regular credit card and prove to lenders that you are working to turn your situation around.

Making the most of your card:

Use your card as much as possible . . .
This isn't an invitation to go on a spending spree! Only spend what you can afford. Use the credit card to make purchases you may have used a debit card for in the past. This way, you know you won’t be spending money that you haven't budgeted for.

. . . & . . .

. . . Repay the full balance every month!
It's no good doing one without the other. Make sure you repay the full balance in the interest free period. This will show lenders you are a responsible client and you will avoid the high rates of interest that typically accompany these cards.

N.B It may be helpful to set aside some money at the beginning of each month to make sure you can pay the credit card bill at the end of it.

Things to watch out for:

The APR
Any poor credit rating credit card will have a high interest rate. This is the lender's way of covering their investment. With a low credit rating you will be categorised as 'high risk' to lenders. To safeguard themselves against any money loss, if you can't pay back your expenses, they increase the APR (usually up to about 30 or 40%) to ensure they make a profit.

Of course, what usually happens is that the bank has its cake and eats it too, as they usually recover any money from non-payment and collect interest along the way. Don't let this happen to you! Spend wisely and always pay off your card each month to ensure that you work your way up the credit score card.

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