There are some things to consider when you are in the market for bad credit unsecured credit cards. In fact, if you apply for one of these accounts and are turned down, it may decrease your score even more. The wonderful world of revolving debt isn't so wonderful to most people. While it's wise to have an account to use in case of emergency, it's also a temptation that many cannot resist. Before you sign up for any bad credit unsecured credit cards after bankruptcy or any other time, you may want to consider a few things.
What is the interest rate?
As you'll soon realize, the interest rate on bad credit unsecured credit cards is very high. In fact, you'll often find that if you pay the minimum balance, it will take years, sometimes decades to pay off only a few thousand dollars of debt. If you have a poor score, you certainly cannot expect to get a decent interest rate. Many consumers find that the interest rates just make bad credit unsecured credit cards unaffordable. Be sure you read the fine print before you sign up for bad credit unsecured credit cards. You may also want to check out how rates are determined and look at ways to instantly boost your score.
What if I miss a payment?
Bad credit unsecured credit cards will typically have stiff penalties for late or missed payments. This can have further impact on your poor FICO score, and increase the amount of monthly payments you'll need to make. In fact, many find this to be the beginning of a downward financial spiral. Of course, if you keep up on your payments, the interest rates will likely decrease over time. However, those with a very poor score have fallen behind in the past, at least in most cases, so some changes may be needed. It's very possible to do more harm than good when you get a new bad credit unsecured credit card. You may need help to remember paying your bills on time.
Is there an annual fee associated with the bad credit unsecured credit card? If so, there will be payments required even if you don't make any charges. These fees can be $100 per year, or in some cases, even more. Read the fine print carefully before you sign on the dotted line. Are there monthly fees associated with the account? This goes beyond annual fees, and into late penalties and fees, insurance coverage, and plenty of other hidden money makers for the company. Bad credit unsecured credit cards often come with a high price.
How much can I afford?
You really need to sit down and plan out a budget before you take on bad credit unsecured credit card. If you cannot afford to make payments whenever needed, you really need to stay away from these accounts. Are you planning on using the card for living expenses? If so, you will have major problems. Will the card be used for emergencies only? If so, you may be okay, assuming you can avoid the temptation to use the account for wants, rather than dire needs. Bad credit unsecured credit cards can cause you some major problems if they aren't used properly. Don't let bad credit unsecured credit cards put you in the hole even more.
Do I have alternatives?
It may be best to simply avoid the bad credit unsecured credit cards altogether. Can you work a second job, very part time to save a few bucks? There are some odd jobs for fast cash. Can you borrow a few dollars from your parents with lower or no interest rates? Can you cut household expenses? If you have alternatives, you should explore them carefully.