When you are applying for credit for the first time or have lost your good credit rate and are initiating yourself into debt relief programs, you are likely to be subject to high interest rate credit cards. Although these rates are undesirable, when used correctly they can still help you to reach your financial goals especially when used in conjunction with other debt relief programs.
Most importantly, you should use your high interest card as a charge card rather than a credit card. It is essential to never carry a balance; this will avoid you receiving high fees that can be difficult to pay and ruining the good work achieved through your debt relief programs. Late payments on these credit cards incur a high default interest rate making it harder to pay off the debt.
High interest credit cards are best used for small purchases that you can pay in full at least five days before the due date on the credit card. This will immediately help to improve your credit rating and will increase your credit options. If you have other debt, ensure you pay off the high interest rate credit card debt first as it costs more to carry this debt than forms.
After six months of making all your payments on time, ensure your lender is providing credit reporting agencies with your new credit information. Some financial institutions refrain from sharing your information in order to stop you from receiving competing card offers.
You should ask your credit card company for a better rate after one year of making payments on time as it is possible that they will not automatically offer you anything. If the credit card company refuses, it is best to seek a better deal or to look for new debt relief programs as you no longer need to be paying a credit card with such high interest rate.