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In order to do many mundane activities
these days, a credit card is almost a necessity.
Ever tried to open a bank account or rent
a car, and the first requirement is to hand over your
credit card? Even friends planning to share driving
duties must flash their plastic to prove their credit
existence to many major car rental agencies.
Some people just prefer the practicality
of not carrying cash around all the time.
For still others, there's the peace of
mind that comes from having credit readily available
in an emergency.
But for the credit destitute, plastic
is hard to come by.
Not everyone has offers from credit lenders
stuffed in their mailbox. In fact, those with bad, little
or no credit history may be yearning for even a single
offer -- any offer -- to arrive one day.
When it finally does -- or when you head
out in search of credit -- the "deals" can
seem like anything but. First of all, high annual percentage
rates, to the tune of 18 percent, 20 percent, 22 percent
or more, are common on credit cards offered to those
with poor credit.
The 9.9 percent APR for a card geared
toward getting your credit "back on track"
seems like a lucky break -- until the eye meets the
fees list you're likely to encounter.
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Credit card fees: |
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"Look at it from the bank's perspective,"
says Tracey Mills, a spokeswoman for the American
Bankers Association. "High risk equals high
cost. The riskier you are, the higher you'll pay for
credit."
But if you're willing to pay, that piece
of plastic can be yours. "You can have pretty much
the worst credit in the world and still get a credit
card these days," notes Richard M. Krawczyk, publisher
of The
FinancialFitnessTips.com Report newsletter.
Credit cards are available even for those
who have hit financial rock bottom.
"One of the biggest surprises for
consumers who've been through bankruptcy is how easy
it is afterward to regain credit," says Gerri Detweiler,
author of "The
Ultimate Credit Handbook: How to Cut Your Debt and Have
a Lifetime of Great Credit," now in its third
edition.
Where to find them
If you don't receive any offers in the mail, or if the
rates and terms are unacceptable, there are many places
you can search for the best possible deal -- online,
by phone or in person at your local bank branch. Bankrate
provides readers with interactive tools that enable
you to search for low
interest rate cards, as well as no
annual fee cards; secured
cards; student
cards and rebate
or frequent-flier cards. There are many more online
sites you can use to search for your best possible deal.
"With more than 6,000 lenders out
there, chances are most people would qualify for some
type of card," Mills says.
Lenders will extend a credit hand to nearly
anyone, often hoping for a long-term relationship. HSBC
Bank Nevada is a good example. Their Orchard Bank MasterCard
Classic "is a bridge card that enables customers
who have less than perfect credit or no credit to speed
their movement along the credit spectrum," says
HSBC representative Rahsaan Johnson. "It gives
us ... an opportunity to reach the customer early in
the process of building or rebuilding their credit.
So when they're ready for a car loan or a mortgage loan,
they have a history of working with us, and we hope
that they will continue to do so."
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