People with a bad credit rating may benefit from obtaining a sub-prime credit card, it has been claimed.
Sub-prime credit cards
generally have a lower balance limit and charge a higher rate of interest.
They also require the holder to pay back a higher percentage of the outstanding balance every month.
However, people who would not be able to obtain a standard credit card because of their credit rating can get similar advantages from a sub-prime version, according to Provident Financial.
Spokesman David Stevenson says it is “very hard” to take advantage of all the offers available to consumers these days – such as cheap flights – without a credit card.
He added that many people on low incomes want low credit limits “and banks aren’t really into the business of doing that”.
In related news, online debt advice forum IVA.co.uk has said that IVA agreements are “a lifeline” to those that need them.
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