| Paying with plastic has become a common part of | | | | high and by opening an account and keeping up with |
| everyday life, with more people now using credit or | | | | your repayments, your credit rating will slowly be |
| debit cards than cash for day to day purchases. The | | | | improved to the point where you may be able to apply |
| rapid rise of online shopping means that it's almost | | | | for a cheaper card further down the line. |
| essential to have some way of paying by card, but | | | | People with more severe credit problems such as bad |
| people with poor credit ratings have always struggled | | | | debt or a previous bankruptcy may find that even |
| to get approved for credit cards. It's not impossible | | | | these starter cards are out of their reach, which |
| though, and there are ways for people with even the | | | | leaves only one real option : prepaid cards. These |
| most impaired credit histories to enjoy the convenience | | | | cards, also known as secured cards, are not in fact |
| of plastic. | | | | credit cards at all as they need to be 'loaded' with |
| People with mild credit problems or low incomes will | | | | funds before you can use them to spend. |
| probably not be approved for the most heavily | | | | After you've credited money to your account, the card |
| advertised credit cards with the most attractive offers, | | | | can be used like any other Mastercard or Visa, with |
| but many companies operate a policy known as Risk | | | | the important difference that you can only spend |
| Based Pricing. This basically means that their cards will | | | | money that you have in your account - you can't build |
| offer a different interest rate depending on the credit | | | | up a debt. This means that there is very little risk for |
| score of the applicant. If your credit rating isn't good | | | | the card issuer, and so acceptance is virtually |
| enough to be accepted for the card you apply for, you | | | | guaranteed. The flipside is that the issuer doesn't earn |
| may be offered a different card with similar features | | | | money by charging interest on your balance, and so |
| but a higher interest rate. | | | | they instead impose a variety of different charges on |
| Risk based pricing is a great way for people with | | | | the cardholder ranging from a small percentage of |
| some adverse credit history to get a card, but people | | | | everything you spend using the card to a monthly or |
| with more severe problems will need to look | | | | yearly administration fee. You may also be charged a |
| elsewhere. Several companies offer a card specifically | | | | considerable sum for even applying for the card, so |
| aimed at people with poor or no credit history, and | | | | shop around and check the small print carefully before |
| market them as a 'first' or 'starter' card. The idea is to | | | | signing up. |
| offer a card with a low credit limit and a comparatively | | | | To sum up, no one would deny that a bad credit rating |
| high interest rate, as a way of allowing people to being | | | | makes it harder to get a credit card or other plastic |
| to develop some positive history on their files. | | | | payment solution, but with a little searching, there are |
| While these cards are poor value in comparison to | | | | cards of some kind available for nearly everyone. |
| more mainstream offers, the acceptance rate is very | | | | |