Subprime – Subprime Credit Cards, Part 2

Posted on | February 11, 2009 | 1 Comment

The initial Subprime Credit Cards article explained that any credit card with a rate higher than 15% is considered a subprime credit card.  Discover Card, Citi Mastercard and Capital One all offer credit cards with a rate of 0% for the first 12 months and under 12% after that.  While not everyone can get these cards, it never hurts to try.  There are also many cards available for bad credit borrowers.  Many of these cards offer rates below 10% with a small annual fee.  It is worth paying a $50 or $100 annual fee to get a rate below 10% if you know you are going to carry a large amount of money on a card.

It is very easy to set up an excel document to determine if it is worth it get a card with an annual fee.  If your payments are reduced by more than $100 on an annual basis, it is a no brainer.  What makes it even more alluring is that this cards will often offer several months of no interest.  Do not be fooled into believing that the no interest grace period will save you HUGE amounts of money though.  Many individuals go on a spending spree during this period and actually compound, no pun intended, their financial problems.  As soon as the grace period ends, you will be surprised at how quickly interest adds up.

Subprime Column

Comments