| Establishing or repairing damaged payment credit | | | | interest rate but only for a limited amount of time |
| can be a daunting task at best. It can be | | | | after which it will increase significantly. Depending |
| extremely difficult to find a company that is willing | | | | on the company, it could go as high as forty |
| to take a chance on someone that has no prior | | | | percent. |
| payment history, whose payment history is | | | | The fees associated with sub-prime credit cards |
| limited or who has defaulted on any past financial | | | | can also be very costly. The annual fees alone |
| obligations. That does not mean it is impossible. | | | | can range anywhere from $25 to $79. You could |
| Many companies offer sub-prime credit cards to | | | | also be charged several other fees in addition to |
| people with limited or poor credit. | | | | the annual fee. These might include a one-time |
| Sub-prime credit cards are ideal for establishing or | | | | account set up fee that is between $29 and $59, |
| repairing damaged credit but they do not offer | | | | a one-time program fee that is between $95 and |
| much as far as means for additional spending. The | | | | $200 and a $7 or $8 monthly servicing fee. In |
| initial spending limit is usually fairly low, ranging | | | | most cases, all of these fees are deducted from |
| between $200 and $300. While this might not | | | | the credit limit before the consumer even |
| seem like much, it is enough to help the issuing | | | | receives the card. Because the initial limit is usually |
| company determine how well a consumer can | | | | very low to start with, that leaves very little, if |
| handle their account. If he/she pays on time | | | | any, for spending. It is wise to compare the rates |
| every month, their limit may gradually increase as | | | | and terms of each card before you apply so that |
| well as their credit rating. A lower spending limit | | | | you can get the one that best suits your needs. |
| also protects the company from a significant | | | | If you are only looking to establish or repair your |
| monetary loss in the event that the consumer | | | | payment history, a sub-prime credit card might be |
| goes into default. | | | | the way to go. While most of your spending limit |
| While sub-prime credit cards can be beneficial they | | | | will be absorbed by all of the associated fees, you |
| can also be very costly. The interest rates are | | | | will still be making the required monthly payments |
| usually significantly higher than normal because | | | | which over time will improve your credit rating. It |
| consumers with less than perfect credit are | | | | will not happen overnight. It takes time and |
| considered to be high risk. There are some | | | | discipline. |
| companies that offer a low introductory initial | | | | |
