plastic-with-bad-credit

These days debit cards, cash cards and credit cards are a way of life with most people preferring to carry plastic than cash.

In today’s world a credit card is often the most convenient and secure way of buying; allowing you to buy online, over the phone and spread the cost of everyday purchases. You can also use a credit card worldwide and hence making it easier to manage money when on holidays or trips abroad.

We all know the main credit card companies and it’s easy to shop around and find the right credit card for you, your circumstances and preferences … as long as your credit history is good and the card companies will accept your application. Apart from a bog-standard credit card, companies also offer incentives in the form of low starting interest rates, zero interest on balance transfers, cash back, free insurance, charity donations and such like – if your credit is good they want your business!

If you have a history of bad credit, or if you don’t yet have any form of history a credit card could seem beyond your reach. However, there are a number of card providers who specialise in the provision of cards for this growing category of individuals. Sure, interest rates will be higher and limits may be lower but, used correctly they can be a significant help in rebuilding credit history and rating and help towards giving lenders back the confidence in you as a borrower.

A debit card is usually provided alongside a bank account, it’s linked to the account and authorises the transfer of funds from the card holders account to a third party account normally as payment or goods or services. This same debit card very often acts as a way of withdrawing cash from a national network of cash machines but all transactions are only authorised as long as you have the money in the account in the first place or you are operating within the terms of an agreed overdraft or credit facility.

And then there’s the prepaid cards which come without a credit check as you pre-load them with money which is then ready for you to spend at home or abroad. If you can’t get a credit card then a prepaid card can give you the flexibility of plastic but without any credit risk as, quite simply, if you haven’t loaded the card up with cash you can’t use it. They’re also great for giving to the kids and allowing them to get used to money and to spend online or in shops without carrying cash. Use them online where the use of plastic is a necessity or take them on holiday as a practical alternative to carrying foreign currency and the security risks that brings.

A prepaid card can also be a benefit in rebuilding credit ratings – whilst there is no credit check involved most prepaid cards are designed in such a way that they can help to rebuild credit.