The following is a guest post from Moneysupermarket.com.
How Bad Debt Credit Cards Can Help You
If you find yourself with a bad credit score, it may be hard to believe that a credit card can help you get things back under control. Note that not all credit cards will be beneficial and it may be difficult to get approved for others. It is important to find the right opportunity and take advantage of it by making your payments on time each month and building up a positive credit history again.
Finding the Right Card
Use a company like MoneySupermarket to compare bad debt credit cards and take several different things into consideration.
First, make sure that you know what the fees are for the card. Will you need to pay an annual fee? What are the charges for being late or going over your credit limit? Fees tend to add up quickly.
Check on the interest rate. While you want the lowest interest rate possible, because it is a bad debt credit card the interest rate will probably be higher than some of the alternatives. Just do the best you can to get the best deal on a rate.
Remember that this card is going to help improve your credit score. The day will come when you can apply for a credit card or a loan with a lower interest rate. The goal is to pay off the card in full each month and as long as you stick to that, even though the rate is high, it should have no effect.
Making Good Use of the Card
This credit card, while costly, can benefit you greatly when used correctly. Only charge what you can afford to pay back at the end of the month. The goal is to pay as little (ideally none) in interest and fees as possible while building a positive credit history. If you pay off the balance in full at the end of every month, you will surely save money by avoiding interest fees.
If you cannot pay off the debt at the end of every month, you are still okay. However, it is vitally important that every payment you make is on time. If possible, pay the monthly bill early.
You want this credit card to show that you have not only paid your debts, but also paid them on time. You don't want any bad marks on your credit rating because of this card. The goal is to rebuild your credit score.
Having a low credit score does not mean the end of the world. It does mean that you have an opportunity to slowly put things back in order and increase your credit rating. A bad debt credit card is just one tool for you to use.