How Your Credit Score Affects You Getting A Fixed Rate Credit Card

With all of the turmoil going on in the economy the days of easy credit are gone. It really is amazing to think how any bank would offer any kind of credit to people with poor credit scores. This does not include people who have never had any credit, but the people that have proven that they cannot control their finances. Many of these people have had foreclosures, bankruptcies, judgements, liens, and collections. The second that those hit your credit report your credit score will start dropping dramatically. You can usually find yourself with a credit score hovering around the low 600 (if your lucky) but more than likely in the 500s and lower.

Banks nowadays have finally smartened up and decided that they should only take risk on people that have proven that they can pay their bills on time. Getting a high credit score is that easy. All you need to do is pay your bills on time and you can expect to have a credit score in the mid to high 700s. Major credit card issuers like Chase, Bank Of America, and Discover had to change who they gave credit too. Their where times over the past 6 years that these same companies were giving credit cards to people with credit scores below 600. Sure, they were charging high interest rates to these individuals and they were thinking that they were going to make 15%-30% interest on those credit card holders. It sounded like an easy business plan. Charge high interest rates to people that are high risk. Well, it back fired on companies like Bank of America, Chase, Citibank, and Discover. The same people that had poor credit scores would run up the balances on their credit cards all the way to the max. Occasionally making a payment to the credit card would keep them from getting the card taken from them or closed.

The credit card holder would spend to the limit, lets say the limit was $5k, but the minimum payment was $30 a month. This $30 did not even cover half of the interest they were spending. So what these people did was spend to the max and just not pay it back. It was that simple. Spend $5k on stuff and just not pay the banks back. It was that easy. The funny thing was that the banks kept on sending them credit card applications to these people again and again.

Realizing that they cannot just approve anybody on a credit card the banks after suffering from major losses on credit cards and foreclosures decided they can only lend to people with credit scores over 700 now. You might be able to find a fixed rate credit card with scores between 650 and 700 but it is not going to be a low fixed rate credit card. You should expect to pay over 10% with scores between 650 and 700.

Now more than ever you need to be responsible when it comes to your finances. When that credit score drops down to 699 do not be expecting an approval on a credit card. The banks cannot afford to take any more risk on people that have proven that they cannot pay their bills back.