Cards that credit you with debt
If you are having difficulty obtaining a credit card, make sure that you do not land yourself in debt, as creditors are waiting to take your cash.
Unscrupulous lenders will promise you a leg-up on the credit ladder but read the small print as the gloves are on and they are packing the punches with APRs of 30% and higher.
Vanquish are targeting the sub-prime market which means that those of us who do not have a squeaky clean credit rating can own a credit card, but at what expense?
A typical example of the interest rates for this card shows that a £250 purchase will incur an interest rate of 39.9%. If you were to pay just the minimum payment for this amount, it would take you six years to settle the debt. Typical interest charges would be in the region of £78 for the first year. On top of this, Vanquish only accept minimum payments of £10 or 3% of the balance, so just keeping the debt collector at bay, would be quite a costly affair each month.
Many credit card companies are likelier to offer those with good credit ratings lower rates. Those who have defaults or county court judgements will fall into the hands of lenders such as Vanquis.
It is extremely unfair for credit card companies to charge higher rates to those who are clearly less able to afford it. Their motives are questionable, as it is impossible for people with poor credit to afford each and every repayment, which leads them towards only one outcome - debt.
Finance News posted on 03/09/2007 10:49:16
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