It’s amazing how a plastic card can give its holder instance access to credit to buy goods and services. It gives the person the power to purchase almost everything he/she wants. Imagine what you can achieve with a credit card.
However, there are certain people who can’t qualify for mainstream credit cards. They are those who have had financial and credit issues in the past which may have negatively affected their application for prime cards.
Since credit cards are the easiest way to gain access to credit, credit limits are set according to to the cardholder’s credit rating. People with poor credit scores and history may find it difficult getting prime credit cards issued by banks, and other lending companies.
Luckily, these individuals may still get their hands on a certain type of credit card — the nonprime credit card.
Nonprime credit cardholders enjoy the same kind convenience that people with conventional credit cards get. Same as any credit card, this allows short-term financing accessible at the point of purchase. And just like a mainstream card, its misuse can have damaging effects. That’s why the cardholder should be responsible when using it.
Types of Nonprime Credit Card
The first thing to consider is the type of credit card a person should get. Being a responsible cardholder means knowing what card is right and works best for you. Here are the two common types:
Secured Credit Card
For this one, the lender will ask for a cash deposit. The money serves as a collateral which provides the lender a safety net to ensure that credit balances get paid.
Unsecured Credit Card
On this one, no collateral is asked from the cardholder. The lender will just have to trust that the holder will make consistent payments towards the credit balance.
Why is a Nonprime Credit Card Beneficial?
Rebuilding Your Credit
Your credit rating may have crashed because of mismanaged debts. When you’ve been caught in a similar situation, it can be traumatic that you would avoid credit cards at all costs. However, you should know that it is also credit that can help rebuild it. If you look at the situation carefully, it is the attitude towards debt that is the problem and not the credit card per se.
A nonprime credit card allows an individual to improve their credit standing. If you become more responsible for making regular payments and being cautious with your expenses, you will slowly fix your credit issues.
Moreover, lenders will be able to see how you’ve changed your attitude towards dealing with debt. If they notice that you’ve been making great improvements on paying your credit dues, they may be able to help you get more favorable loan deals.Find the best mortgage rates, click here.
Extending Your Purchasing Power
Let’s be honest, there are things you just can’t afford without a nonprime credit card. It potentially increases your purchasing power by allowing you to buy anything and pay for it in smaller, more manageable monthly payments.
Moreover, some credit card companies have reward programs for loyal and responsible cardholders. If you use your credit card (responsibly!) instead of paying cash, you can bank on rewards and benefit from it by the end of the year. You can splurge on cash rebates, travel miles, hotel accommodations and more without having to spend extra.Connect with a lender, click here.
Who brings hard cash every time?
Say goodbye to paying cash or having to line up on a long ATM queue just to withdraw money. Credit cards are the more convenient way to purchase goods. It’s like having a bank in a form of a plastic card inside your pocket. Again, do all your purchases with your nonprime credit card to accumulate points and build your credit.
If you’re afraid of overspending, here’s an effective tip. One way to make sure that you won’t overspend is to treat your credit card like it is cold cash. Make sure that you only purchase what you can afford if it were a cash purchase you are doing.
These are many good things you can get from owning a nonprime card. However, in order to enjoy these benefits even more, remember to always be a wise spender.
Use a nonprime credit card can act as a ladder for you to improve your credit. Once you’ve done that, you can switch to a prime credit card with better terms and interest rate. Also, use it to make your life more convenient, not more depressing. Always put in mind that unpaid debts will haunt you back, so deal with them maturely. Accountability and self-control are key to make sure that your finances are on track while enjoying the great benefits a nonprime credit card has to offer.Click to See the Latest Mortgage Rates»