Borrowers get easier access to bad credit credit cards
18th November 2011
During the recession, the offers which were seen on bad credit credit cards meant that many people were left to pay high levels of interest whilst also enduring strict terms and low credit limits. However, professionals from the credit sector have suggested that bad credit credit cards have better deals on offer now than before the economic downturn hit in 2007.“
For bad credit credit card customers who might be opening an account for purposes such as debt consolidation, the introductory incentives which are seen on a number of credit cards for bad credit mean that there is more competition and choice on the market than there has been in a while.
Some people are being invited to take out cards which have interest-free periods of more than a year on average, and this period is far longer than what has been seen in the market in recent months according to a price comparison website. Credit cards for those with bad credit history now have as much as 16 months of 0% balance transfers, reducing the amount of interest people can pay and preventing the perpetual nature of the debt some people can experience.
Consumers on the whole are beginning to become far more sensible with how they spend their money, but there is no certainty over how long this responsible lending will last. There are some fears that there are going to be difficulties to repay amongst consumers should the budget created to tackle the deficit backfire, resulting in a double-dip recession.
One analyst from a money-saving expert spoke of cards which were offering more than one incentive, an attractive prospect in itself which could save consumers a substantial amount of money for the duration of their credit card. One bad credit credit card was offering a window of interest-free credit which was combined with 5% cashback on purchases.
People who might have had bad credit are also finding that they can get a card which doesn’t penalise them too hard about their record. An analyst from a price comparison website explained: “Lenders are loosening their criteria and, with more market activity, we would expect them to get easier.”
Despite these promising signs of credit becoming more readily available in the market again, some experts are stressing that consumers should not get complacent. When compared with the application processes seen before the recession, it is still extremely difficult to get a credit card if you have a chequered financial past. Even worse, making applications which proceed to be declined can leave a footprint on your report which can make it even more difficult to get credit in the future.
This good news for consumers is also despite recent reports that lending for businesses is not in as high amounts as it has been in previous months. Lending to companies has been one of the priorities for some experts, who believe cash flow back into the private sector could boost the economy back into a better state of health.