Credit Score News, Tips & Advice
Website CertifiedPrivacy Protected
Credit Score News, Tips & Advice « Credit Scores > Credit Score News > Low Credit Consumer Must Choose the Right Card – Experts

Low Credit Consumer Must Choose the Right Card – Experts

By Sally Maison
Published: Wednesday, November 11th, 2009

Experts encourage consumers with low credit score to choose the right credit card so they can get what they really want while being able to meet the fees. They add that choosing the right card can help improve a consumer rating and consequently lead to a better financial standing.

Low Credit Consumer Must Choose the Right Card - ExpertsIssuers such as banks and department stores charge higher rates to people with poor credit score because of their increased risk of defaulting. Additionally, most subprime cardholders come are tagged with very low credit limit, at times as low as $250.

Those who want to use their plastic for convenience, such as shopping online, renting a car, booking a hotel, or making flight reservations, are encouraged to choose a prepaid card. Because of its appeal to consumers with low rating, prepaid, along with debit, cards have increased their market share in the United States as the third quarter of 2009 closed. Holders of this type of plastic prepay money to it, as they would on normal checking accounts, and simply draw the deposited money when they need to.

Industry specialists noted that fees for prepaid cards vary widely so they advise consumers to compare offers before signing up so they can get ones with the lowest fees.

Consumers who are enjoying pristine credit scores but still want to move up to the super-prime level are advised to choose an unsecured card. This is the typical plastic that Americans used and is the most widely circulated at present. People with low rating will benefit best from secured credit cards, according to experts. But they warn consumers that both plastics have tricky rules and fees, telling them to read terms and fine prints carefully when applying for anything.

Specialists advise consumers to know well the type of card they want to get so they will not end up paying a lot for something they do not want.

Card applicants are advised to decide first if they want to applyi for a secured or unsecured credit card. Those who are applying for secured plastic, typically consumers with poor credit rating, have to deposit money first ranging from $250 to $500 as an issuer’s security against default. The fees for this type of card are lower but consumers must come up with funds for deposit.

Experts conclude that poor credit consumers can build their rating through the same means that ruined it. Since the ability of low-credit consumers to borrow is limited by their rating, experts advise them manage well whatever they have. They add that it is important to determine one’s needs first in order to identify spending goals.

No Comments

No comments yet.

RSS feed for comments on this post.

Sorry, the comment form is closed at this time.