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How credit cards can actually help people with bad credit

Many people in North Carolina who are coming out of a bankruptcy may be worried that their credit is irreparable or that they may not qualify for a credit card because of their low credit score. It may be tempting after a bankruptcy to want to avoid using credit cards altogether out of fear of getting into additional financial trouble.

However, not only will they most likely qualify for a credit card, it may actually benefit them to have and use one. Since a person’s credit score plays such a big role in making large purchases like cars and homes, it is simply not realistic for most people to eschew credit altogether.

According to Yahoo Finance, lenders have become more willing to extend credit to subprime borrowers as the economy is continuing to rebound from the Great Recession. People with low credit scores can benefit from arming themselves with information as they shop for a new card. Since applying for a new card shows up on a person’s credit report each time, it makes sense to only apply for cards that that person thinks he or she is likely to be approved for. Knowing what their credit score is and monitoring it regularly will also help to that end. In fact, some credit card companies even offer their customers free access to their credit scores, reports NerdWallet.

One good option for those with low credit scores may be to start with a secured credit card. A secured credit card is similar to a prepaid debit card in that the money is put forth at the beginning and then drawn down on by using the card. However, unlike a prepaid debit card, the activity from a secured credit card is reported to the credit bureaus and therefore responsible use over time can lead to a person’s credit score rising.

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