The Economy Today

A bad credit credit card

“Bad credit card card” is used to refer to credit cards that can be obtained even with a bad credit rating. The bad credit card cards provide opportunity to people (with bad credit rating) to improve their credit rating. In that sense, bad credit credit cards act as rescuer for such people. So, bad credit credit cards also act as necessary a training ground for people who have not been able to control their spending urge in the past.

Bad credit card cards are commonly known as secured credit cards. The bad credit card card (or secured credit cards) requires the individual to open up an account with the credit card supplier and maintain some cash balance in the account. Why is that required? Well, credit cards are a business for the credit card suppliers; so how can they trust someone who has defaulted on his/her payments in the past? After all, a business is about profits and such risks are a threat to profits. The bank or the credit card supplier will generally pay interest on the balance in your account. However, it’s best to check this with the bad credit card card supplier/bank. The credit limit on the bad credit card card is determined by the cash balance in the account and is generally between 50-100% of the cash balance. These bad credit card cards are also referred to as debit cards, owing to the fact that they work less in a credit-giving manner and more in a debit-giving manner.

There are plenty of bad credit card cards available in the market. When searching for the bad credit card card that is best suited to you, you should consider 4 things in particular: the minimum balance that you are required to maintain in the bank account, the credit limit that you will receive (i.e. the percentage of your bank account balance that you are allowed to spend on your bad credit card card), the fees/other-charges applicable to the procurement of bad credit card card and the rate of interest that you will receive on the balance in your bank account. An ideal bad credit card card would have no fee/other-charges associated with it and would require zero or a very small amount as minimum bank balance. It would also have something like 90-100% of bank balance as its credit limit. Moreover, an ideal bad credit card card would also offer a good interest rate on the bank balance.

Bad credit card cards are really a good concept that provides respite to people with bad credit rating by letting them enjoy the benefits of credit cards while they mend their credit rating.

Ring. Ring. Ring.

You know who is calling. It's the fourth time today, and ironically enough it's during dinner time. That pit in the bottom of your stomach starts to churn. You know who it is: the collection agency.

You also know that if you answer that phone that your dinner will be ruined. But your dinner is already ruined just thinking about it. What do you do? Why don't they just go away?

If you have ever had a collection agency come after you for a past due debt, you can relate to the above situation. These unholy hell hounds are unleashed when creditors cannot get you to pay a debt that is owed. Now, they don't care WHY you can't pay, they just know you don't. And there are many good reasons for not being able to pay. If you lost your job, you may not be able to pay a credit card bill because you are focused on keeping your family fed with what little you do have. If a family member is gravely ill (say with cancer or some other life threatening disease), you may not be paying because you are doing the right thing by taking care of their medical needs. Either way, creditors and bill collectors don't care. They don't typically have a sense of ethics or nobility or responsibility.

With that being said, let's examine the creditor and collection agency relationship and finds the weak points in it.

According to DebtorKungFu.com , a debtor's rights informational website, collection agencies are NOT your original creditor. They are independent third parties. They do not typically own your debt; they are merely trying to collect someone else's debt. They are governed by both state and federal laws, specifically the Federal Fair Debt Collection Practices Act.

A collection agency is hired by a creditor and given full rights to help collect a debt. They are tasked with doing whatever is necessary (and lawful) to get you to pay. Oftentimes, though, collectors step across the line and abuse and harass debtors both mentally and emotionally. Keep in mind, this is what they are paid to do and they are VERY good at it. They will try to make you feel 2 emotions: fear or anger. But that is a topic for later on.

Now the key to the creditor-collection agency relationship is simply this: money.

Creditors are outsourcing their headaches on collecting a debt hoping to make a profit once the collector gets the money from the debtor. The collection agency makes a profit by earning a commission on the amount of money they collect. That is why collection agents always try to get the most amount of money out of you they can. They more they collect, the more they make.

Key #1--Thus, if you can find a way to take away the motivation for having such a relationship(i.e., remove everyone's profit), you will get rid of your collection agency.

Knowing this alone is the first step in the art of making collection agencies absolutely hate collecting money from you.

But knowing how to make collection agencies stop wanting to collect your debt is only part of the equation. Actually GETTING them to want to stop contacting you is another thing entirely. For that, I give you part 2 of this article: How to Make Collection Agents Hate Collecting from You.

If you cannot find part 2 of this article, please visit DebtorKungFu.com for more information.

The author is just your average Joe. He is married with no kids, trying to put his wife through medical school. Since the downturn in the economy, he watched his credit go from A+ to F and back again. His experiences are first hand in dealing with collection agencies and tricks he learned to use against them. As a result, he founded DebtorKungFu.com to help others who find themselves dealing with aggressive collection agencies.