Sub-Prime Credit Cards

Sub-prime credit cards can offer consumers with a poor credit history a fresh start – a chance to improve their credit score while enjoying the advantages of using a credit card.

Sub-prime cards work the same way as a regular credit card. The cardholder will get be able to make airline and hotel reservations online or over the phone, pay-at-the-pump at gas stations, and get “swipe, sign, and go” convenience anywhere credit cards are accepted.

But as anyone with poor credit knows, there is a higher cost in getting credit, and this includes sub-prime credit cards.
Card issuers who specialize in sub-prime cards charge more in fees and higher interest rates because they are extending credit to high-risk consumers – it’s simply business.

An annual fee, a one-time processing fee, and possibly a monthly service fee may all be part of applying for and using a sub-prime credit card. By contrast, prime credit cards may come with an annual fee, but not monthly service fees or processing fees.

Sub-prime credit cards also come with an annual percentage rate (APR) that is higher than a regular credit card. While rebuilding your credit, the last thing you need is to be buried in debt due to a punishingly high APR.

To side-step this and save yourself from being charged interest charges, pay your entire balance every month by the end of the