Bad Credit Cards
Posted January 22nd, 2009 There are some bad credit cards out there but with a little care you can avoid being a victim of one. Most bad credit cards aren’t gotten by choice but because the applicant didn’t read the terms and conditions of the credit card before they completed and submitted their application.
Obviously, a high interest rate is the most obvious indication of a bad credit card but that can be avoided by paying the balance in full every billing cycle. The worst feature of a bad credit card and one that keeps dipping into your wallet is the annual fee. This fee can be as high as a couple hundred dollars a year! Sometimes fees give you a return for your money; one very prestigious credit card charges a yearly fee but provides you a free rental car should you be involved in an accident. If you have a credit card with an annual fee that isn’t providing you any kind of benefit in return, it’s probably time to find a way to get rid of that card.
What makes bad credit cards even worse is that when you close an account, it reflects negatively on your credit score. You wouldn’t think this would be so but when you close an account you alter your credit utilization ratio. Let’s say you have six credit cards with a total of $50,000 available and you owe $10,000 on those six cards. Your credit utilization ratio is now 20%. If you cancel a couple of those cards, you might bring your available credit down to half of what it had been and your utilization score rises to 40%, making you appear to be a bad credit risk.
If you have no intention of applying for any type of credit, taking a hit on your credit utilization score won’t be a serious matter. The effect of cancelling a card doesn’t usually last more than a couple of months so in this case it might serve your best interests to cancel a bad credit card.
You can also play a waiting game with the credit card issuer, hoping they will cancel it on their own. This is happening frequently in these tough economic times; people who don’t use their cards at least once a month sometimes find them cancelled by the issuer. This won’t look good on your credit! It’s always best for you to take action rather than depend on someone else to do it for you.
It’s best to avoid getting a bad credit card in the first place. No matter how small the print is or how many pages it takes up, read the terms and conditions before you sign up for that card. Companies are counting on your not reading those documents! You will find out what the penalty is for a late or missed payment, any annual fees for the card and what the interest rate really is on unpaid balances. Taking a few minutes to read the terms and conditions can save you a lot of trouble, aggravation and expense!
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Comparison of Top 10 Credit Card Offers
| Credit Card | Card Details | Interest Rate | Cash Advance Rate | Balance Transfer Rate | Annual fee | Interest free days | ||
|---|---|---|---|---|---|---|---|---|
 Halifax All in One Credit Card |
The Halifax All in One credit card offers a great introductory rate, and is perfect for saving you money now as well as in the future. | 15.9% APR | 27.95% p.a. (variable) | 0% for 9 months | No Annual Fee | 59 Days interest free |
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 Virgin Credit Card |
As well as a great rate, the Virgin Credit Card comes with:
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16.6% APR (variable) | 27.9% p.a. (variable) | 0% for 16 Months (2.98% fee on balance transfers) | No Annual Fee | 50 days on card purchases |
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 Capital One Classic Visa |
This card is designed for people with bad credit ratings, this is why the rate is quite high. |
Typical 34.9% APR variable | 34.9% APR | 34.9% APR | No Annual Fee | 56 days for purchases. 0 days for balance transfers and cash. |
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As well as earning Flying Club miles which you can spend on brilliant rewards like flights, upgrades, car hire and more, a Virgin Atlantic Credit Card gives you up to 46 days interest free on card purchases. |
17.9% APR typical rate | 20.9% p.a. (variable) | 0% for 6 months (2% handling fee) | No Annual Fee | Up to 46 days on card purchases only. |
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The Virgin Prepaid MasterCard from Virgin Money is a prepaid Mastercard that you can add funds to, and use these funds for normal purchases. |
N/A | N/A | N/A | N/A | N/A |
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5% cashback on purchases in your first three months (up to £4,000 of spend). Thereafter, earn 0.5% on the first £3,500, 1% on £3,501 to £10,000, and 1.5% after £10,001. |
18.9% p.a. | 27.9% p.a. | 18.9% p.a | No Annual Fee | 56 days for purchases. 0 days for balance transfers and cash. |
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Vanquis Visa Card is designed for people with no credit history or who have previously had bad debt. |
39.9% APR variable | 39.9% | 39.9% | No Annual Fee | Up to 56 days on card purchases only |
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The award winning prepaid card with no credit check or bank account needed. | Funds in your Account will not earn interest | Prepaid only - N/A | Prepaid only - N/A | £59.40 p.a. (£4.95/month) | Prepaid only - N/A |
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