Credit cards for bad credit Canada pose a complicated dilemma to people who might want to use them. Do you ignore them to avoid high fees and the potential to make things worse for yourself, or do you get one and try to use it to improve your credit as you go? There’s no one right answer for everyone, but generally speaking, it’s better to take advantage of the easy credit that these cards offer you and carefully use them to build up your credit score once again.
Taking a Risk
The first thing you should do whenever you’re considering making a move that is supposed to be good for your financial health is to make sure you have as little risk of making things worse as you can get. It should not be overlooked that even thinking about getting credit cards for bad credit Canada is in some ways a dangerous idea. You didn’t end up with bad credit for no reason – it’s likely that you ran into problems with money mismanagement and overextended yourself at some point. If you go out of your way to get more credit in your hands at a time when lenders are doubtful that you can manage it responsibly, you could easily land yourself in greater trouble than you are currently facing.
Credit cards for bad credit Canada often come with high interest rates, even higher than the ones on cards meant for people with adequate credit scores. Your costs will add up quickly if you carry any sort of balance at all, and the longer you do that, the harder it will be to get ahead of that debt. Let that get out of hand and you’ll wish you had never even considered touching credit again. This might sound dire and things certainly don’t have to go this way, but it’s always a possibility. You need to be aware of the potential for your situation to spiral out of control in order to make a truly informed decision about whether or not you want to get one of these cards.
Why You Should Still Get One
Just because there are risks doesn’t mean you shouldn’t necessarily consider going ahead with getting a card for bad credit anyway. In fact, for most people, it’s an excellent idea that will allow you to work toward leaving bad credit behind altogether. Recovering your credit is essential to leading a life with fewer financial worries, so you need to get those efforts underway as soon as possible.
A credit card for bad credit is perhaps the best way to do this because it gives you access to a line of credit instead of a lump sum loan. This way, you can continue to put some credit activity on your monthly reports for as long as you need to until you meet your credit goals. This is much easier to manage than handling a loan over the same period, and if you play your cards right, you can actually come away from using a credit card for bad credit having paid absolutely nothing in interest fees. While you probably won’t be able to get away with not paying an annual fee for your card, that still leaves this as the cheapest option by far.
Staying Safe With Your Card In Hand
If you do choose to get a card, you should keep some simple guidelines in mind to make sure you’re using it in a way that does not jeopardize your credit profile again. Having a credit card again doesn’t mean you should use it hapharzardly; in fact, you should be doing quite the opposite.
The first and most important thing to remember is that you should be paying your entire balance off every month, or at least coming very close to doing so. When you already have bad credit, there is never a good excuse for spending money on whatever you want and leaving your credit card bills for later. Those bills will cost you dearly in both money and credit reputation, and you most likely can’t afford either of those expenses right now. Try to only charge expenses to your card when you are certain you can pay them back without any trouble.
The second thing many users of credit cards for bad credit Canada need to be warned about is that it is extremely easy to overspend with them in hand. Don’t use your card as an extension of your income. You should know by now that it is not free money but a way of taking a little cash from your future self to help out now. If you take too much, you will leave your future self without enough to cover the expenses that you’ll be facing then. While you have probably already learned this lesson from the incidents that led to your having bad credit in the first place, getting access to credit again might cause you to be tempted back into your old ways. It’s imperative that you resist that urge.
The last thing you should avoid doing is charging too much to your card at one time. Never overuse your credit card unless it’s a truly dire emergency. You are aiming to improve your credit as much as possible, so the most you should ever charge to your card under normal circumstances is 30% of your credit limit or less (that’s the threshold at which point your credit might take a hit even if you repay everything on time). For most people, that should still leave you plenty of room to make purchases, even large ones, so few cardholders will find it restricting at all. For the very best results, however, you’ll want to spend only minimal amounts on your card. Even just buying a chocolate bar or pack of gum with your card each month is enough to have positive effects, assuming you pay off that small balance promptly too. By keeping things on such a tiny scale, you have less of a chance of making a catastrophic mistake and more room for error if you need it.
Watch Out For These Possible Consequences
In addition to practicing safe credit card use for its own sake, you might find it helpful to consider the consequences of credit misuse at this point in your financial life. You should keep in mind that if you were to slip up again, it would be even harder to recover from that fall and you would have to pay even more to even try to do that. No matter how bad your credit is, it can always get worse, especially if you add a bankruptcy into the mix – that is even more of a concern if you already have a past bankruptcy on your record that you want to eventually move past one day. It is absolutely vital that you stick as close to model credit behaviour as you possibly can, or at least avoid any major slip-ups.
You should be aiming to prove to the credit bureaus that you have learned from your past mistakes and will never pose an elevated credit risk again. This will be hard to do to begin with, but it will be even harder if you don’t stay motivated to stay rigidly on the path to recovery. Make sure you monitor your credit as you go and aren’t accidentally causing yourself any problems, either – if you’re doing things right, you should see small but staedy upticks in your credit over time. Remember, bad credit should never be for life, and getting out of it is something that you can control. Do your best to make this happen and you’ll be much better off for it in the future.
Take Your Pick of Credit Cards For Bad Credit Canada
If you’re going to go ahead and apply for a credit card meant specifically for people with bad credit (and you should!), it’s important to do so as wisely as you can manage. It’s a good idea to get help from an outside source that can show you the full range of potential cards for you and let you see how each of them compares to all the others.
That’s something we can help you with. Our partner lenders offer a selection of credit cards for bad credit Canada that is sure to have something that meets whatever criteria you feel are important in a card. Applying for them is easy and fast and can be done in the same browser where you conducted your search. You’ll be done with the entire process in just a few minutes of clicking and typing, and after that, all you’ll have to do is wait. That’s how easy getting your credit back can be.