395 Main Street, Salem, NH 03079
Ph: 1-603-893-4300
Gaudreau News
Are Low Credit Score Credit Cards Really an Answer?
While these low credit score credit card offers may be piling up in your mailbox each week, signing up for one may cause your credit score more harm than good.
Offered by the industry's big boys like Citigroup, American Express and Capital One, low credit score cards arrive with all the bells and whistles of their lower-interest brothers but have a series of hidden fees, rising interest rates and dangers.
Fifteen percent of your credit score is dependent on your past credit history. If you've had late payments, over credit limit balances or credit card defaults, then a lower credit score will occur. The lower your credit score, the less likely it is that you'll be receiving offers for a respectable interest rate. Now ask yourself, if I'm having difficulty paying off my current debt, is it really wise to assume more? NO! Run, don't walk, to your nearest shredder and get rid of those credit card offers!
Will the new credit card offer allow you to consolidate your current credit card debt onto a lower interest rate card? Even if you're offered a low 'teaser' rate, keep in mind how adept the credit card industry is in justifying a higher interest rate once you've accumulated a balance. Will the lower interest rate remain in effect indefinitely or will it expire after, 3, 6 or 9 months after which time the rate may skyrocket? The credit card industry usually does not care about whatever financial problems may occur in the future. Indeed, they usually use your difficulties as a justification to raise your rates and hit you with fees so that your future payments will not reduce the amount you actually borrowed.