Credit card companies are normally trapping their costumers and put them in debts. Avoid using credit cards and help yourself to get rid of paying your debts.

How credit card companies earn profit

Credit card companies do not like those customers who pay their debt on time because they cannot earn more profit from such costumers. Those clients who cannot pay their debt are the main source of income for such companies because they can charge extra penalties from such costumers and also charge high interest rate for such poor credit score clients.

Trick played by credit card companies

These companies are used to inform their clients that they have to pay just 4 to 5 percent of the total money and rest of the amount will be paid in installments. This seems so attractive to the clients but in fact they are charging more than you have borrowed from them by applying many hidden charges and high interest rates. For example if you are supposed to pay 5000 dollars, they will offer you to pay just 200 dollars each month but besides this they will charge high interest on your net balance. That will affect your credit score also.

Beware of credit card companies

Many credit card companies are trying to sale their credit cards by offering many gifts and low interest rate offers. Read the full story

If you have bad credit score then it doesn’t mean that it can stop you from getting a credit card. However, it can make the entire process of getting credit card longer. Moreover, it is also capable of making things more difficult such as, larger purchases etc. Still there are certain ways by which you can get credit card and simplify this complicated process.

Tips to Get a Credit Card with  Poor Credit

If you are dealing with bad credit and still want to get a credit then following tips will help you in doing so, here you go:

Go for Smaller Retail Store

This is the important one. Try to apply for credit card at any of the smaller retail stores. That’s because sometimes smaller companies show willingness to work for you. Make small purchases after getting your application approved. Establish a habit of paying off at least minimum monthly payments on regular basis. Make sure neither you delay nor you miss any payment.

Contact your Bank & other Saving Institutions

If any of these institutions have already in business with you then they are more likely to give you credit card.

Consider Getting a Secured Credit Card

If every other option fails then consider getting a secured credit card. You will have to open and maintain a saving account in the term of security for your line of credit. This credit line will act as the percentage of your deposit. Read the full story

According to the recent research from Moneyfacts, the credit card’s average rates have reached to the 12 year high then ever.  The average credit card rates remains at 18.8% this month, showed by the report. These rates were 17.7% a year ago and 16.8% two years ago. In 1998, the last rise in rates from this point was recorded and at that time the average rates were 21.1%.

The best rates in the year 1998 were 7.25%, as compared to date rates that are 0.5%. This shows that the difference between the base rate and the credit card rates has risen by 4.45% since 1998.

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Most of the credit card companies make the bulk of their money from finance charges. A finance fee comprises of the extra charges that are added on to your existing balance if it isn’t paid off in full within the grace period, or before the next billing cycle.

The charges can vary depending on your balance and the APR of your credit card. Although they may seem small if you’ve got low balance of around a few hundred dollars, they can certainly add up and form a big amount if the unpaid balance is huge.

It is also possible that you won’t be doing much more than paying the interest on your credit card, if you only make the minimum payment each month, while leaving the principal balance untouched.

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