When you receive your monthly credit card statement, you are usually shocked to find that your card is maxed out and the balance owed is way over the limit. So where do you go from here?
Your best option is to go to a bank or a credit union and inquire about a credit card with a high limit. Your credit rating can be negatively affected by going to one of these establishments with bad credit but if it's necessary, these will generally not charge an annual fee. Another option is a secured credit card such as a MasterCard.
These cards give you the option of having a deposit put into an account where the amount you used for a new purchase can be withdrawn at any time up until your next payment. These cards are generally issued by banks, credit unions or other financial institutions and can come with a high interest rate.
If your credit rating is bad, or you just want to have more control over how much money is on your card then a debit card may be the better choice. A debit card is similar to a credit card in the sense that you are given a pre-determined amount to spend before the money is withdrawn. In the case of a debit card, your balance is deducted each month at the end of your statement. However, there are some limitations and restrictions on this type of card.
The key limitation to these cards is that you can only use them for things that you have already paid off and for which you have received a credit. For example, if you have been paying off a credit card debt, and you try to use a debit card, the bank will probably reject the application because you are already late on the debt. This means you will have no use for the credit card.
When deciding what your next step is to get your credit card paid off, it may be a good idea to look at options online, or contact the credit card company directly. They will most likely want to talk to you and try to help you resolve your credit problems. You may also be able to get a discount if you make purchases with your card.
A card will be helpful to you but it won't improve your credit score. The main purpose of these cards is to help keep you from getting into debt again. They can even help you get a job, which is something that many people who do not have credit have to offer.
If you find that you cannot work out a solution with the credit card companies, you may need to consider filing for bankruptcy. This should not be your first resort. Instead, you should take the time to make sure that you get your financial affairs in order and that you do not have any unnecessary credit card debt to worry about in the future.
