If you’ve just fallen into bad credit, you might be wondering what kind of credit you’ll have access to and if you can even get a credit card at all. Credit cards for bad credit Canada are the solution to this problem, and this article is here to take some of the mystery away from them. In it, we’ll talk about how they’re different from other cards, what they’re good for, and what kind of final result you can expect from them.
What You’re Giving Up
It’s important for anyone looking for these kinds of credit cards to understand that doing so will always mean making a compromise. While there are credit card providers out there willing to serve people with bad credit, they aren’t nearly as numerous as those serving the general population. This means you will almost always be at a disadvantage in terms of bargaining power. These cards almost never have a very high limit so providers have some way of keeping your spending in check (when you have bad credit, you’re at high risk of defaulting until proven otherwise, so most lenders will do their best to minimize the risks of taking you on as a client). You also probably won’t get cards with low or no annual fees or any kind of lowered interest rate; omitting these things is part of how providers secure their revenue stream.
Another thing that these kinds of cards typically don’t have is any kind of reward system. Being accessible to those with poor credit is sort of considered the selling point for the cards because there are so few options for that demographic, so few providers go the extra mile to include other incentives like this. You also might not be able to get a card at all without putting down a deposit on it first – cards that ask this of you are called secured cards and are very commonly used by people with bad credit. There are unsecured credit cards for bad credit out there, but they tend to fare worse in all the above aspects as a trade-off, so you may not necessarily come out ahead by choosing them.
What You’re Getting Instead
The reason why credit cards for bad credit are such important financial products to have on the market if that they give people in a precarious situation a critical lifeline to grab hold of: in other words, a second chance at good credit. It’s nice to have the ability to buy things you don’t currently have the money for again, sure, but these cards are really meant to give you an opportunity to show how credit-savvy and responsible you’ve become since you got into trouble. The only way to get better credit is to start using whatever borrowing options are available to you right now and making the most of them.
Credit cards for people with bad credit are easy to get and easy to use, and unlike a loan, they can be used over a long period of time to create a truly reformed credit history. Once you have a year or two of responsible credit usage under your belt, that’s what new creditors will judge you by instead of your past mistakes. These cards aren’t meant to be relied on forever; they’re a solution you can use to get yourself out of a specific and troubling financial situation. You’ll need to use them consistently to make the most of them and be on your very best behaviour in terms of making your payments (not a single one should be even one day late!), but as long as you do, you’ll be getting the most out of them and preparing yourself to move on in your financial life.
Working Toward the Future
If cards for bad credit are a stepping stone toward something else, where do they lead? Your end goal should be a life with better credit. As you probably know from the days before your credit troubles, it’s an incredibly different experience from life with bad credit, and it’s worth working for.
At first it might seem like your efforts with using credit cards for bad credit aren’t paying off. Don’t panic, though: building credit takes time. Once you improve your credit a little more, you’ll be able to graduate to standard credit cards. You might have to stick to the entry-level ones for the time being, but even the most mundane of typical credit cards usually beats one aimed at people with bad credit. You’ll usually be able to ditch the annual fees you were probably paying, and you may also be able to lower your interest rates. You’ll feel the improvement immediately, and virtually everyone will be able to meet this credit goal without too much trouble.
You could stop there and be perfectly comfortable; many people never achieve more than a fair credit score in their entire lives. If you’re really ambitious, though, it’s not too much of a stretch to make it all the way up to good or even excellent credit. If you do reach that level, you’ll be able to qualify for some of the best credit products out there, as well as very low rates on any loans or mortgages you might choose to take out.
Find Plenty of Options For Credit Cards For Bad Credit Canada Through Bonsai Finance
Now that you have a better idea of what you’ll experience if you apply for credit cards for bad credit Canada, it’s time to get down to business. Before you make any commitments, hop onto our web portal and let us show you what our trusted credit card provider partners have to offer for people with bad credit. You’ll have a full set of cards to choose from, so you’ll be able to evaluate each one and choose the best one for you. It’s never too late to start recovering from bad credit, but the sooner you start, the easier it will be.