All credit cards offer many benefits and features. Some come with a few disadvantages. To convey my point I will leave the disadvantages for others to write about. All credit cards are good in their own way for their own purpose and for that specific applicant. There are many credit cards for applicants with good credit, bad credit or with no credit at all. There are the so called "bad credit cards" and the "good credit cards."Bad credit cards fit consumers looking to build "good credit." Good credit cards fit consumers with good credit looking to take advantage of benefits that suit their daily lives. So are all credit cards good? Yes, because in some cases you have to start somewhere and sometimes, it comes at a price.
Consumers with good credit attract the credit cards that would better suit their income, credit history, spending habits and paying habits. Many credit cards that approach consumers with good credit tend to offer great transfer rates and lower interest rates on future purchases as long as the consumer's credit doesn't change in the wrong direction. Everyone has their individual needs and perceptions of their credit. So the only challenging factor for someone with good credit is to maintain the good credit status and keep a close eye on your credit limit to credit debt ratio. In my opinion, your ratio should be at around 25% to 40% because it is a responsible level to be proactive in managing your credit cards. A 25% credit limit to credit debt ratio would be $250.00 balance on a $1,000.00 credit limit. Investing in a credit monitoring service also helps to keep a third eye on your credit so you can focus on your busy life.
Consumers with bad credit attract the credit cards that seem to be outrageous because of interest rate, credit line or terms of the agreement such as annual fees and processing fees. In my opinion, their is no such thing as a bad credit card as long as they report the account to Experian, Transunion and Equifax (CSC Credit Service). Instead of them being called bad credit cards they should be called credit building cards. If you cannot get over yourself by accepting a credit building card, maybe a secured credit card from your bank would be the best choice as long as they report to the credit bureau. Never think bad credit is forever or that it can't ever improve, it can with responsible steps. If you get a so called bad credit card then make sure you fulfill your end of the agreement, and don't make excuses for not paying on time or letting it charge off because it was only $300.00. I think one factor that makes that type of card good is that the credit lines are usually no more than $500.00. That low of a credit line is a good thing because worst case scenario your minimum payment is between $15.00 - $25.00. Not bad for establishing a credit line that will be worth dividends in the long run. Yes, it will benefit you as time is established behind the credit card. Credit building cards are only short term because once you have began to establish yourself with 2 - 3 credit building cards your score will reflect the responsible habits and your score will begin to rise. So are bad credit cards good, of course they are.
Whether you have good or bad credit cards the responsibility is the same. Make your payments on time and watch your credit limit to credit debt ratio. These two simple steps, if followed consistently, will keep your credit cards as the good benchmark for your credit score to be based from. I have only referenced your credit cards that allow minimum payments and not any other types of credit cards or other credit lines on your credit report. I have also not referenced the impact of derogatory items on your credit report that would affect the establishing of your credit. All cards have benefits and features that are advantageous to consumers or contain hidden value, even if the card does not seem very desirable. When you decide to get any credit card base it on your own financial need and on the advantages that will benefit you and your credit profile. Credit is life and life is credit, understand it wisely.
Credit cards continue to multiply and it sometimes seems like a day doesn't go by without another amazing offer dropping through the letter box! They can seem very attractive at times because they are so convenient to use. There's no need to carry any money with you ever again if you believe the hype. They enable you to go shopping without having to carry money with you and you can pay the exact amount just by handing it over. If you haven't been paid yet, then you don't need to worry, because the money will still be there.
When you shop on the Internet or over the phone, it's the only good way to do it because on the whole it's very secure and what else are you going to do, post a cheque or send a money or postal order and then wait for it to be received and in the case of a cheque cleared by your bankers?
However, like anything convenient credit cards do have a flip side ? in fact, they have lots.
Can You Keep Track?
When you walk into that shop and hand over the card, the money is taken from the card, and the card goes back into your wallet. You still have all the things you started with ? there's no less money in your purse or wallet to remind you of what you've spent other than the receipt tucked into your wallet or more usually popped into the bag with your purchases.
It's a common truth that everyone has a tendency to underestimate what they spend. It's also very true that smaller amounts can add up quickly on a credit card without you even noticing. If you think about it in terms of the way phone bills work and then apply it to everything you buy on your credit cards ? well it doesn't bear thinking about does it!
You are paying money for nothing.
Using credit cards has to be one of the best ways of losing a percentage of your income to a credit card company in exchange for nothing. The moment you start to build up any balance on your credit card you are paying the Credit Card Company interest. Not only that, but generally speaking we all try to pay our credit card bills as soon as we receive our salary or wages, so you don't even get the chance to earn any interest on the monies going into the bank. When you think about it, you're losing out twice over!
Designed to keep you in debt.
Your credit cards are trying to keep you using them and paying interest. You will find it very difficult to pay off all your credit cards once you have them. The company will do everything they can to stop you paying before you've paid them lots of interest. The more debt you show you can pay back, the more they'll try to offer you, until they get you to the point where you can't pay and then they start getting nasty and adding fees for this and that. There are so many Credit Card Companies today who seem to take little responsibility for the fact that they have encouraged people to get further and further into debt. They argue that it was the Credit Card holder who spent the money not them that kept increasing the available Credit limit.
The Lie in the Name.
Credit cards are called credit cards to avoid saying what they really are and that is debt! It's quite a clever trick isn't it because ?Credit? sounds good and as if we have money in the bank! To be in Credit is always portrayed as a good thing however when thinking about Credit Cards you will do much better if you always remember this simple saying: ?credit cards are debt cards?. Use the word debt as often as you can whenever you talk about credit cards to remind yourself that every time you use one you are creating a debt for yourself!
But Sometimes You Can't Avoid Them. When you need money in an emergency and you just don't have any, there's no doubting that credit cards can be useful. They are also a very useful way of proving to credit rating agencies that you can handle debt, and this will be taken into consideration when you apply for car loans or a mortgage.
Just remember that whenever you handle credit cards, you're playing with fire. Do everything you can to keep your use of them to a minimum, and you'll have a much better financial life.
Paul Duxbury has sinced written about articles on various topics from Puppies Dogs, Wedding Bells and Home Businesses. Paul Duxbury is a successful online entrepreneur and was previouslya Corporate Banker. His new site at www.sort-your-finances.com addresses the problems caused by Credit Cards and provides helpful free advice.. Paul Duxbury's top article generates over 49500 views. to your Favourites.