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February 17, 2009

3 Major Disadvantages of Bad Credit Card

Filed under: Credit Card — Tags: , , , , — admin @ 3:49 pm

By having a bad credit you will not be able to receive good credit card offers. Instead, credit card companies will charge you with quite unreasonable charges. Here is a list of 5 major disadvantages of owning a bad credit card…

High APR (annual percentage rate)

With bad credit comes high APR on credit cards. To be able to lower APR on your credit card, you will need to make your credit card “secure”. In order to do that, you will need to link a good collateral or bank account to your credit card. If you canĀ“t “secure” your credit card it will result in high APRs and low credit limits.

Huge annual fees

Credit card companies are taking a risk when they are issuing a credit card to people with bad credit. They are also aware that people with bad credit are usually desperate to find a credit card which can help them improve their credit history. Knowing this, credit card companies will probably demand high annual fees for people with bad credit.

Low credit limits

Having a bad credit will result in low credit limit on your credit card. What is the biggest problem in having a low credit limit? The biggest problem would occur if you exceed your limit. Your card issuer would charge you with a penalty interest rate, which you definitely want to avoid.

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