Got Bad Credit? Make Sure You Don’t Pick The Credit Card That Will Make Things Worse

Credit cards have become an essential for most people now as it allows you to spend without paying immediately. Banks or lenders will try their very best to sell their services to you – one of them being their credit cards.

Since it is for free and it is not much of a hassle, you give in to the application process and eventually receive the card – everything seems great up till this point. When you use the card, however, you realize that there are a number of “hidden fees” that were not made known to you as you were applying for it. Having said this, it is important to always stop, thoroughly research about the pros and cons of the card, and then get to the application process. After all, what is the use of a credit card if you cannot even use it to your convenience, right?

Teaser Rates

When you apply for a credit card, they lure you in through low interest rates or sometimes, 0% interest rates. Yes, these are good and competitive rates, but they do not last a long time. It is called teaser rates because it is not permanent – at most, they can offer you teaser rates up to a year. After that, the standard rates apply.

Late Fees

As you would already know, it is extremely crucial to make payments on time. It is important to always check late terms when applying for a credit card as some banks can go up to $39 as well as have a 30% interest fee if one payment is not made on time. Late fees can definitely burn a hole in your pocket and so it goes without saying that payments should always be made on time.

Balance Transfer Fees

Credit card companies have another tactic called the balance transfer fees. Some banks offer a low rate or even 0% on balance transfers, but do not be fooled, as they usually have a fee for transferring money to another account through your credit card. Yes, there is no interest on the transfer, but there is a fee associated with the transfer.

Cash Advance Fee

In the case of an emergency, you may need to get a cash advance from your card since it is on credit, anyway. However, most credit cards charge a fee on this – this can be a flat charge or can range from 2 to 4%, depending on how much you are withdrawing. Remember that with cash advances, you will need to pay a higher interest rate as opposed to just swiping your card for purchases. If that is the case, swiping your card would be a better idea.

Conversion Fee

Some cards should not be used abroad as there is a conversion fee. Though you can use it, it is not ideal as the charges can usually be 2 to 3% of your total purchases. This also applies to when shopping online from foreign establishments or companies as there is a need to cover the costs when converting the currency to US dollars.

Closure Fees

Closing a credit card can prove to more detrimental if there is no need to close it. Carefully consider whether there is a need to close the credit card as it can also hurt your credit rating. If you have decided to go with it, try calling customer service and ask them if the closure fee can be eliminated or at the very least, negotiated down.

Annual Membership Fees

Some lenders believe that having a credit card is a privilege. Because of this, some banks make sure to charge you an annual fee, or quite simply, a membership fee. Now, if you are not one who would think to use a credit card often, then do make sure to reconsider even applying for one – you may end up paying an annual fee that is higher than what you have spent on your card. Make sure to weigh the pros and cons and decide whether or not it is the best move for you.

It is important to always do your research and make sure to pick out the card with the best offers for you.
What does bad credit mean and how does it affect what kind of credit cards you get? Check out our tips on Cost of bad credit, how-tos about credit cards, and more at

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