Credit Cards

Credit Cards for bad credit holders

If you are dreading that Christmas this year will be a lean one,   your one consolation will be that you are not alone in your feelings. Many families in the UK are wondering how they will manage with many signs indicating that the coming months will prove to be more difficult.  The only way to survive Christmas is to make the right decisions to make things easier in the coming months. One of the solutions offered by UK Credit card companies is the subprime Visa Card that is marketed right throughout the year as a possible means of rebuilding   credit ratings.

One of the benefits of this card is that at least one third of those who applied, even with bad credit rating have been approved while those who do not default on their monthly payments for at least four months continuously can have their credit limits raised from £200 to £500. This however has brought forth a lot of criticism from the consumer Credit Counsel Service that was very much against raising the credit limits so conveniently instead of encouraging those with bad credit to make an effort to pay more than the minimum payment required.

Many such negative views have been expressed by financial experts who fear that in view of the mainstream companies putting a lid on lending, this type of service would only allow desperate people to get credit cards which would most probably drive them further and further into debt.  People with poor credit scores find these subprime credit cards very tempting because they are the very people that the card companies target. These cards however come loaded with additional fees with fees being charged even to obtain a card. But the fact remains, when people with a history of bad credit are unable to get credit the traditional way; they will resort to any means of getting it even if the fees are high.

The positive side of the subprime UK Credit card is that it is specifically meant for people with poor credit to build up their credit ratings and if they somehow make their payments on time every month, it can certainly be a good thing. Furthermore, with Christmas round the corner, this could turn out to be a blessing in disguise since not only do they get a chance to have at least a passable Christmas, it would also give them the opportunity to improve their credit score, which is definitely a positive aspect of the subprime card.

The prediction in financial circles is that the interest rates will be go up even higher as far as subprime UK credit cards are concerned, while many other additional fees will make these cards even more costly than it already is. This has created fears in the National Foundation for Credit Counseling which feels that people who are already using these subprime cards are the very people who cannot manage their financial obligations, making the card more expensive will only create further problems for them.

We can only hope that saner counsel will prevail as far as the UK Credit card holder is concerned and even if they do obtain subprime credit cards, they will use them intelligently and mostly for the purpose of improving their credit record.