Credit Cards - Those Who Need Can't Get
Credit Cards. Probably the best and worst thing that ever
happened to this world. If you're not familiar with what a
credit card is (I'm sure there's a least one person in this
world who isn't) then a quick English explanation is this. A
credit card is a way for you to buy something today and pay for
it tomorrow, or 30 days from tomorrow, or never, as some people
do, or at least try to do.
The number of articles that can be written about credit cards is
almost infinite as there are many types of cards and many
benefits and problems associated with getting and having a
credit card. In this particular article we're going to cover how
a person with bad credit gets a credit card. But in order to
understand that, you have to understand how people with good
credit get a credit card. When you see the process you will
realize that the people who need the cards the least have the
easiest time getting them.
A person with excellent credit basically has no trouble getting
a credit card. As a matter of fact, credit card companies
practically knock down their doors trying to give them credit
cards. If you open up your postal mail on a daily basis you're
bound to get at least 1 or 2 credit card offers a week in your
box if you have excellent credit. And we're talking the absolute
premium cards with huge maximum credit limits and very low rates.
It should be pointed out that the way these companies know to
send you these fantastic offers is by doing a credit check on
you. If they see you've had credit in the past of a sizable
amount and have never been late with a payment, you pretty much
go to the top of their list of prospects. They know you'll pay
them on time and more likely than not you'll give them a decent
amount of business, so even at low interest rates they'll make
quite a bit of money out of you.
Then we come to the person who has no credit or bad credit.
Maybe they had a car loan previously, lost their job and were
late with a number of payments, or worse, they couldn't pay off
the loan and lost the car. These people are considered bad risks
and very few credit card companies will issue them a card even
if applied for, let alone offer them one through the mail.
This is where the insanity of this business lies. The rich,
excellent credit person, who could probably pay off everything
with cash certainly doesn't need the card and most likely only
gets it out of convenience, so they don't have to carry around a
lot of cash is offered cards. In the meantime the person with
bad or no credit probably has a cash flow problem in just paying
the bills and really needs a credit card to be able to pay
things off over time. This person practically has to jump
through hoops in order to get a card and once they do the rate
they get is astronomical.
For example, at today's rates a person with excellent credit can
probably get a credit card at around 8%. A person with bad or no
credit may have to pay as much as 20% or more for his card and
the penalties for late payments are severe and usually charged
on the first offense, where a person with good credit usually
just gets a first time warning.
Seems like this system is just plain backwards, but that is the
way it is. In our next article we'll cover another interesting
aspect to credit cards.