Credit Card Issuers Woo Customers With Fair Credit
The uptick in the American economy is good news for people seeking lines of credit. While the recent Federal Reserve interest rate some people saw hike as bad news, it’s actually a sign of economic recovery. For credit-seekers, especially those whose credit score is not stellar, this is good news.
“Banks may have a greater incentive to loan out reserves at higher interest rates, and the increased flow of additional credit would boost economic growth,” said the director of the Institute for Economic Competitiveness at the University of Central Florida.
Higher interest rates might not sound like great news, but in fact, for people with fair credit seeking a line of credit, it’s not so bad. The key is not to carry a balance on the credit card. That way, the interest rate is irrelevant.
For people with fair credit, finding a credit card or getting any type of loan can be difficult. But while it’s not as easy as it would be for folks with excellent credit, it is far from impossible. The current economic climate makes that even more true. During the housing crisis and the government bailouts of the big banks over the past decade, it became extremely difficult to get a credit card or a mortgage if your credit was not close to flawless. However, these days lenders are a little more lenient.
Consumers have the chance to improve their credit scores
Credit cards for people with fair credit may come with fewer rewards and incentives, and may have a few more fees and a higher interest rate, but getting one of these cards is a good opportunity to improve credit.
To achieve a better credit score, people should do the following:
• Make all payments on time
• Keep balances low—ideally don’t carry a balance over from month to month
• Keep accounts open for a longer credit history
• Have a mix of types of credit
• Don’t apply for too many cards at once
The most important things on this list are to make payments on time and keep balances manageably low. If people are having trouble getting out of debt and making a plan to pay off their debts, they can seek credit counseling from one of the many nonprofit agencies across the country.
Another option is to transfer a balance to a 0% APR balance transfer card. These cards offer introductory promotions that make paying off debt faster and cheaper. They are generally available to people with fair or good credit.