Having bad credit will make it hard for you to qualify for many credit cards in the mainstream market, but that’s where credit cards for bad credit Canada come in. These cards are great tools for people who have had credit mishaps in the past to feel normal again and start working on their credit for the future, but they also come with some unique risks. The interest rates on them tend to be astronomically high, and since there’s little reason for a person with good credit to choose one, they also almost invariably end up in the hands of a vulnerable population. These things should not discourage you from using them if you need them, but it doesn’t make sense to use them exactly as you would a normal credit card. Following the slightly stricter rules below is a small concession to make that can make things much easier for you down the road.
Start Off Small
When you’re first easing back into credit with a card for bad credit, it’s best that you don’t push yourself too far too soon. A card with a low limit on it is best for right away while you get used to having this power in your hands again. If you’re offered a higher limit than you were aiming for anyway, try to put yourself in the mindset of having only that smaller initial limit at your disposal instead. Doing this will minimize the potential consequences of any problems you might encounter on your credit rebuilding journey, whether they’re your fault or not. If you’re not given access to very much credit to spend, you can’t rack up massive debts nearly as quickly as you would otherwise be able to. That shouldn’t happen anyway, but it makes sense to take some precautions when you’ve probably had trouble regulating your use of credit in the past. There’s no better way to prevent disaster than to actually make it impossible.
Store It Away From Your Debit Card
Another thing you should do when you have your new card in your possession is to find a place for it in your wallet, purse, or other means of carrying cards around that is different from where you keep your debit card. You want them to have separate spots when stored away so that it’s harder to give into a whim to reach for your credit card instead of your debit card when you’re going to make a purchase. You’ll want to use your debit card for most things at first, just to be safe, and there are certain things that you should never be purchasing with a credit card if you can help it. This tip is all about creating and maintaining healthy habits regarding payment methods so that you will only choose to use your credit card when you are specifically meaning to do so. This will keep you spending money that you actually have rather than risking running up a credit bill that is too high by accident. Keep the two types of accounts distinctly separate and you’ll be much better off in the long run.
Stick To Necessities
When you first get your new credit cards for bad credit Canada in your hand, you’ll probably be tempted to use it as soon as possible. When you do, make sure that you’re buying something that you really need and not just something that happened to catch your eye. Making frivolous purchases with your credit card isn’t the end of the world, but it can be the start of destructive habits that you’re better off doing your best to avoid if you can. It may be reasonable for you to branch out eventually, but at least at the start, try to keep your credit card purchases restricted to things that you would have to buy anyway. That way, you can build your credit incrementally over the months without having to take much of a risk with your money. Just remember to pay off what you owe and you’ll be golden.
Always Plan Your Purchases
Even with a budget, it’s still possible to overspend using a credit card if you start thinking that you can give yourself a few small indulgences each month without accounting for them. An extra coffee or a lunch out might not break the bank initially, but it will eventually cause a problem if you start to do this regularly and use your credit card for it. When you have a card meant for people with bad credit, you can’t take the risk of running up a large balance for any reason. Those high interest rates will add up extraordinarily quickly if you let them. It’s your job as a responsible borrower to keep them under control, and the best way that you can do that is to only buy thing with it when you’ve planned to do so in advance. You should never pull out your card on a whim because doing so tends to make people more apt to forget that there is real money involved here, not just a vague promise to pay someone back whenever. It’s more formal and more binding than that, and you should treat that agreement with the appropriate amount of respect.
Review Your Statements Regularly
The best tool you have available to you when trying to accomplish any goal will always be information, and you’ll find all of it you’ll ever need for this particular endeavour right on your credit card statements. Checking them over and comparing them to statements you’ve received in the past few months will help you to identify if you’re staying consistent as planned or starting to go off the rails. It’s concrete, black and white evidence that you’re either doing well with this responsibility so far or need to change your course a bit, which is exactly what you need to help you figure out the patterns that work best for you.
If possible, make a habit of pulling your statements up online every month as well – almost all providers offer this service for free now, and since it’s far too easy to see a bill come in and toss it to the side saying you’ll get around to sorting it out later, this method ensures that you at least lay eyes on every statement that comes in. Save copies of everything just in case and never assume that you know anything regarding your credit cards for bad credit until you’ve confirmed that that is the case. You can never be too careful when the alternative is getting stuck paying massive interest fees.
Make Your Debt a Priority
The number one thing you’ll have to do in order to keep a handle on your behaviour with your credit cards for bad credit Canada is always remember that you are responsible for any debts you incur. It is entirely within your power to pay them off in a timely fashion, and that is what you should always be doing. Once you have a balance waiting for you for any given month, that is the bill that you should be paying right after your rent, utilities and food costs. It doesn’t matter how big it is or how little money paying it off would leave you with to enjoy yourself, or even if you can only pay off a certain chunk of it and will still be left feeling deprived. You must be ready to put your money toward paying off your debts first and foremost or you’ll never be able to make a successful credit recovery – or trust yourself with your credit card for that matter. Making your payments is the most critical part of this whole process, so do not let them slip!
There Are More Credit Cards For Bad Credit Canada Out There Than You Know
Using your credit cards responsibly is incredibly important, and you should only apply for a card meant for people with bad credit when you’ve mastered the skills to do keep yourself out of danger. Once you’re confident that you have, though, think about getting help from Bonsai Finance to actually get your next card. Consulting our search engine tool before you apply can help you to get a better idea of all the possible products that are being offered to Canadians right now. That way, you can choose the best prospect from among the credit cards for bad credit Canada that are available to you, knowing for sure that you’ve made the right choice.
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