For many people a credit card is one of life’s necessities, offering, for example, extra protection when purchasing online, dealing with that unexpected bill or spreading the cost of a larger item and it’s often cheaper than using payday loans. There are also some companies who will only do business with a credit card and will not accept cash or a cheque.
Credit Cards For Bad Credit Risks
People become bad credit risks, in the eyes of some lenders, for a number of reasons. It might be the failure to pay previous credit card bills on time, fall behind with the rent or mortgage payments or have County Court judgements lodged against them.
Whatever the reason the numbers considering the non-traditional end of the credit card market have also increased. So for those with a problematic financial history, what are the options left open if a credit card is essential?
Bad Credit, Credit Cards
Credit cards for bad credit risks or for those with no credit history are an option although there is much less choice and interest rates are considerably higher than other cards; for example variable rates of between 39.9% and 59.9% APR are common. However the companies who operate this type of credit card are much more likely to approve a request for a card even if the applicant has a bad credit history.
Pre Paid Credit Cards No Credit Check
If a person has been repeatedly rejected by lenders, a pre paid credit card may be an appropriate alternative.
- Some credit card companies do not carry out credit checks and guarantee acceptance
- Pre paid credit cards may be safer and more convenient than cash
- They can be used for some travel purposes, reducing the need for cash
- Pre paid cards can be used to withdraw cash at ATMs.
- Pre paid cards are ideal for shopping online.
- Credit cards for poor credit risks are also a viable option for those with no credit history, obtaining credit can be just as difficult for those who fall into this category.
Pre Paid Credit Card Fees
Some pre paid credit cards will incur a purchase fee which range from £5-£15, monthly fees vary but many are around the £5 mark. Transaction fees again vary but could be up to 3% and ATM withdrawal fees range from £1- £3.
Despite the high interest associated with bad credit, credit cards and the various fees linked to a pre paid credit card there is one advantage that will accrue from the proper managed use of both. After a period of time, probably twelve months, and assuming no other financial problems have arisen, that person’s credit score will have been greatly improved.