The Truth about Bad Debt Credit Cards |
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Personal debt is a fact of life that more and more of us are having to live with. Daily more people are falling into the credit and debt trap with sometimes disastrous consequences. Families are forced to work extra, scale down their lives, and even in extreme cases, loose homes and even file for bankruptcy. Many are surprised to hear that in about 99% of debt cases, these extremes can be avoided. There are other options and help available if one knows where to look. If most people were asked, when they last actually looked at their credit card statement, to find out what they are really paying, most would say never. The vast majorities of us with credit cards just pay the minimum payment and repeat this process every month. Most of us, if we were to look would be shocked at what we were really paying. Many cards especially the famous bad debt credit cards entice people with a very low introductory offer. Some even offer 0 percent interest for a time. Many of us fail to read the fine print on these bad debt credit card offers and cannot understand why 6 months down the road there balance is increasing despite they card being paid. Bad debt credit cards usually charge more interest that your standard major cards. They justify this by putting you as a high credit risk. You may get a lower interest rate for a while but after the term ends you may find yourself paying anywhere from 20-40% interest. By simply paying the monthly payment, you balance will hardly move and could even increase. This doesn't help those with bad credit or debt problems solve their issues. Another trick of the many bad debt credit cards are credit rebuilding schemes. Many claim that they can actually help to repair your credit rating once you sign up. The truth is, the only way to repair your credit rating is through timely repayments. If your credit rating is poor, and you're struggling to pay your current creditors, taking on an additional debt and increasing the amount you owe is not the way forward. Even if you do manage to keep up the repayments on the bad debt credit card, your other missed payments will still be reflected in your credit report. If your are in debt trouble, the best way to repair your credit rating is to negotiate with your creditors and make alternative arrangements. Personal debts these days are spiraling out of control. The average household owes between 10-15 creditors each month on top of their mortgage and standard household expenses. Credit is much more readily available than it was 10-20 years ago leading some down the path of financial trouble. If you are struggling with debt, think very carefully before taking on a bad debt credit card. The vast majority of people that sign up for these schemes end up making their problems worse, not better. |
