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January 31, 2007
The Bad Credit Card Fee Trap
If you have been shopping for a
credit card meant to boost poor credit, you may
have found yourself angling for a card with the
lowest A.P.R. possible, which was likely still
sky-high. “Bad credit cards” do tend to charge
high interest rates on their high-risk
cardholders, both to protect their investment in
you, and, well… because they can.
An alternate way for “bad credit card” issuers
to make you pay for your credit boost is though
a mixture of excessive and exorbitant fees.
Ironically, you may find cards fitting this
profile among those with the lowest A.P.R. in
the category! Sure, you’ll save a few interest
points a month, but you may find yourself
shelling out a significant annual and monthly
fee – not to say anything of the one-time fees,
of which there may be four or five.
It only makes sense that those with poor credit
would have to give up some to be able to obtain
a card – that is, after all, one of the things
that makes good credit more desirable- and you
shouldn’t automatically rule out a card with
fees. Just be sure that you aren’t getting
yourself in too deep to start with – account
opening fees always go against the balance of
the card, which is normally low at the
beginning. You may find yourself with a
maxed-out card that you haven’t personally spent
a penny on!
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