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Use caution when getting subprime credit cards

On Behalf of | Jul 11, 2018 | Debt Relief

Many people in Florida and across the country sigh a breath of relief once their bankruptcy is discharged. With a clean slate, they are finally able to rebuild their credit and create a new financial identity. Hopefully, this new financial start is not marred by overwhelming credit card bills and overdue expenses. One common path people take on their way to rebuilding their credit is applying for a credit card, with the intentions of paying off the balance every month. Although this can be a great way to increase one’s credit score, people should take extreme caution when getting another credit card after filing for bankruptcy.

Credit cards that are given to people who have credit scores below 600 are referred to as subprime. Since those with lower credit scores show creditors that they have had trouble with debt in the past, the subprime specialist issuers who distribute the subprime credit cards attach higher interest rates and often times, high fees. Some people may have trouble repaying credit card loans, and the interest rates continue to pile on. Subprime credit cards can take up to 70 percent longer to repay. In some cases, these high interest rates and fees can cause people to seep back into financial debt.

While traditional credit card issuers depend on interest rates to act as revenue, subprime issuers enforce fees to make a profit. These fees include processing, authorized user, annual and maintenance fees. Financial experts recommend secured credit cards for those trying to rebuild their credit as a safe alternative to using a subprime card.


Kingcade & Garcia | A Miami Law Firm