Credit Cards For People With Poor Credit

Credit Cards For People With Poor Credit

In the credit and debt business, and yes they both are a business, there are highs and lows, and cycles of how the business gets busy or quiet.  In the credit business, or the lending of money, business, in years past it had been good, too good.  Banks lent money at a record rate and in doing so did not fully investigate the borrowers ability to repay the loans.  This led to a high default rate, which led to the “credit crunch”.

With so many people in debt and not being able to borrow their way out of it, the debt business got busier as people were looking for solutions and options to get out of debt.

Banks are now relaxing their lending criteria and seem to be granting more loans, especially mortgages which is important for the economy.

However, all those people who struggled financially and may now have weak or poor credit, eventually may be looking again to get credit, and in particular a credit card.

One credit card company, Luma, has seen its business grow and has attributed this growth to their marketing, which is done heavily online and through comparison web sites. They also attribute this growth to the fact they “accept a wide range of credit profiles”.  What this means is that you can have weak, or poor past credit and still get a credit card.

In doing a bit of research for credit cards for people with weak or poor credit through comparison sites, there are banks out there and they do look good, until you look at the APR’s or interest rates offered, which can be 35.9%.  Quite high, however in offering credit to those that may not have the strongest credit, it is an opportunity for someone to get a credit card and rebuild their credit.  The credit limits offered can be quite low as well, but again, if you want to re-establish yourself credit wise, this is a way to do so.

As it is a business, I am sure Luma has calculated what their default rates may be and this in part has been used to figure the APR’s used.  So they will not lose money, and unfortunately there will be Luma cardholders that will end up on the other side of the credit fence, possibly again, and find themselves clients of the debt business.

Of course the other side of that coin are credit cards that are much more exclusive.  These credit cards are for the wealthy and have no credit or spending limit.  Some of these elite credit cards can only be obtained by invitation.

So there are credit cards for the wealthy and those with good credit, and there are credit cards also for those with weak or poor credit