How Can You Get Out Of The Bad Credit Trap?

Convenient, secure, accepted everywhere – people use cards for everything. So what can you do if you’re unable to get credit?

There are lots of reason why you may be declined a credit card. Perhaps you’ve been a bit inconsistent and missed some payments, or have regularly exceeded your credit limit. Or do you have a lot of outstanding unsecured credit on personal loans, credit cards and bad credit gas card? You may even be refused if you’ve never had credit – because as crazy as it may seem, you need credit to get credit.

As you may be aware, it can be tricky to get out of the vicious circle – high street lenders are cautious because of the higher risk involved. However, there are things you can do. Sites like Which Way To Pay feature lot’s of products that are available to those with poor or non-existent credit ratings.

PLASTIC DOESN’T HAVE TO MEAN CREDIT

It useful to have a card, modern conveniences such as shopping online or starting a bar tab are almost impossible if you don’t have one. But this doesn’t necessarily need to be credit. With the sudden influx of pre-paid cards recently, those who have found it difficult to get a card in the past can now get plastic without the worrying about past credit problems.

Prepaid cards work in a similar way to a debit cards – you won’t spend money that’s not there, so it’s impossible to build any bad debt. You simply top up funds in any number of ways (online, via sms, payzone points or the post office) and spend as you would normally. So you get all the versatility of a card without any of the risk.

CREDIT FOR THE CREDIT IMPAIRED

There are also companies that cater specifically to the poor credit markets, with many guaranteeing acceptance regardless of past problems. The only reason that you should ever consider taking one of these credit cards is to improve your credit history. If you’re looking for one, then it’s vital that you do your homework and have the commitment to pay off your balance each and every month. The last thing you want to do is make yourcredit rating worse! However, with time and good management you will be able to clear your history will be in a better position to acquire products that require a good rating, such as mortgages and so on.