At a time when banks and credit unions are offering new credit card offers, financial advisors say it is good news for those consumers with poor credit ratings. Also, it is great news for those with perfect credit because they are able to pick and choose from the many credit cards plans being offered today.
In addition, there are many frequent shoppers who view credit cards as a way to earn rewards and money back on their purchases. For instance, a credit card fan commenting online explained how she uses a mix of seven different credit cards for almost all of her purchases because of the percentage that she gets back on everything she buys. While some would view that using credit cards for money back is easy money, there are others who tend to shun using credit cards even when saving upwards of 3-6% on each purchase.
Credit card offers help people save money
Another aspect of the changing climate in credit cards today is linked to the view that if you don’t carry a balance on your credit card, you won’t have to pay high interest rates. Also, there are many banks and credit unions today that are offering their own brand of credit cards for both personal and business use at 6.5% and 7% interest. In turn, these new credit cards are being offered with no annual fees or worries about credit card limits if you pay your balance off in time.
Moreover, there are new credit card offers that require minimum security deposits of various amounts based on a customer’s credit history and score. For instance, if you are a new credit customer your credit card limit may be around $300 while an increase in your security deposit for this type of credit card can increase your charging ability. Also, the downside of such credit card plans is your credit history is all important when it comes to how much you must deposit. Thus, if you have really bad credit and want a credit card limit of say $4,000 you will need to deposit nearly $4,000 to help secure your card.
Building your credit score over time with credit cards
There are many new and exciting credit card rules today that are aimed at attracting those who either have little or no credit card history or for those who wish to build or repair their credit history. For example, some banks and credit unions are offering an open hand to those with bad credit who are willing to build their credit scores by simply making small purchases with their local bank or credit union credit cards. The goal is to be responsible when using your credit card by never being late with your monthly credit card payment while also keeping the balance reasonably low so as to pay off the balance whenever possible.
Overall, this method of using credit cards to rebuild one’s overall credit score is viewed as both admirable and responsible by the lenders who are taking a leap of faith that you will return to being a good credit borrower.