Bad Credit Cards

Contrary to popular belief, credit cards are not only available for those who have stellar credit reputation. Even bad credit borrowers can also get credit cards. However, with a not so pleasant FICO score, your chances of getting the best deals are not so high….But that certainly does not mean that you cannot get good deals.

Sure, you can expect higher interest rates when you have a bad credit but having knowledge about credit card deals will help guide you in selecting a bad credit card.

Here are some things you should know when getting a credit card:
Be aware that credit card companies make money in the following ways:
They charge interest for balances not paid in full within a certain time, usually within a month.
They charge interchange fees to the merchant every time you use your credit card.
They charge cash advances, late payments or annual fees (some cards don’t have annual fees).
How to know if you are getting the best deals? Here are some things to know when reading the fees.

APR for Purchases

As mentioned, the APR is the interest rate charged on anything you did not pay off within the grace period given by the issuer. It is the monthly interest charge multiplied by 12 (for 12 months). Note though that some cards do not charge any APR for the first six months, but don’t be easily fooled by such offers. The issuer may give you 0% interest for the first six months, but charge you high interest in the succeeding months.

APR for Transfers

Transfer credit cards are great options for people with bad credit. These cards allow you to save money on interest by transferring your credit from another credit card to your transfer card that charges lower interest rate and fees. Some transfer cards do not charge interest for the first 6 to 12 months.

Variable APR

Ask your card issuers whether your APR is variable or not. A variable APR may change based on a nationally set base rate called prime rate. If the prime rate increases by 1%, your APR does too.

APR for Cash Advances

Your card issuer may charge you a different APR for cash advances so this is important to check out. Cash advances refer to cash withdrawal from an ATM or bank using your credit card. Unlike using your card for purchases where you may have a 0% grace period of up to 30 days, using your credit card for cash advances is subject to different fees. Generally, card issuers charge accumulating interest on cash advances the day you take them out.

Late Payment Fees

This refers to interest charged for purchases not paid within the grace period. Most card issuers give up to 6 months for you to pay off such fees/ interest.

Annual Fee

Some credit cards charge an annual fee, in addition to the fees charged for purchases not paid within the grace period while other cards, such as student or youth credit cards, don’t have an annual fee.

Transaction Fees

Apart from the fees above, you should also take into consideration the transaction fees your card issuer may charge you for certain types of transactions. Here are some types of transaction fees:

Cash advance fee: In addition to accumulating interest your card issuer charges you on the day you take out a cash advance, your card issuer may also charge you an additional fee.

Transfer fee: Moving credit card debt from one card to another is also subject to another fee.

Foreign transaction fee: You may also be charged a different fee for any purchases you make abroad using your credit card.
As you can see, there are many fees you should take into consideration when selecting a credit card, whether it be a regular one or credit card for people with bad credit. Knowing how to read the fees will help guide you in selecting the best deal available for you.