Bouncing Back From Financial Dumps - Do Bad Credit Credit Cards?
The Reality of Financial Pitfalls
The worst thing that can happen to anyone is a financial crisis that does not seem to have room for any hope. Financial depression could spring from unemployment, losses in the share market, hospitalization, and other unexpected events. Mismanagement of money could easily result in bad credit, and there’s no such thing as bad credit credit cards. Or so you thought.
The society dictates us to fulfill our own needs and those of our families, and it seemingly shuts its doors on us when we no longer meet its expectations. Financial institutions are less friendly, making it hard for us to get out of the financial quicksand that we are already in.
Is There Sunshine after a Financial Storm?
Like a blessing from the sky came bad credit credit cards. You hear all about them nowadays, thanks to their extensive marketing stunts. Despite your bad credit, you will still be able to apply for a loan in order to re-establish your financial stability. They claim to erase your bad credit to allow you create a new credit reputation. It sounds perfect.
What do they do?
Apart from their claims to wipe out your dark past, bad credit credit cards work just like any other card. They offer convenience, like having the world in a plastic, shiny card. Banking is great, since it’s mostly online and real-time. They also entice consumers with perks such as rebates, frequent flier miles and exclusive discounts. That home theater system you’ve always lusted after can now be purchased in installments! Finally, they give you accessibility to cash through cash advances.
The Reality of bad Credit Credit Cards
However, what is the real deal on bad credit credit cards? There are three rather painful realities of owning one.
First, you will be faced with unreasonable advance fees. Is it not cruel that you are up to your knees in financial depression, and these companies charge you with ridiculous fees you never knew existed? An example of this is an advance fee to process your application. They compel people to pay in advance, and even after so, these people will not the assurance that their application for bad credit credit cards will be approved. They demand this fee shamelessly, because they know you are desperate.
Second, bad credit credit cards attract unusually high APRs, which can only be lowered if collateral is paired with the credit card. Since a person with bad credit will most likely be unable to shell out good collateral, his or her “unsecured” credit card APR remains high.
Finally, bad credit credit cards have high annual fees, which can be as low as 70$ to a few hundreds per year. Think of it this way. You have bad credit, and you are a risk investment for these financial institutions. Companies who offer bad credit credit cards will still want to protect their business more than they aim to help you.
Bottom Line
According to the Federal Trade Commission (FTC), bad credit credit cards are not the solution to your money matters - you are. Ironically, credit cards are the very reason you are in the dumps in the first place. Legal advisors say there is no quick and easy way to clean up your credit reputation. It will need time, effort, patience and discipline. The claims of bad credit credit cards seem too good to be true, and if you are wise, you will know that you cannot right a wrong with a bigger wrong.