Should People with Bad Credit have Credit Cards – No

This is almost like saying should a drunk driver be allowed to drive? Or should a murderer be allowed to own a gun? How much less should someone who is – or has bad credit – be allowed to hold a credit card?   Unless we want to continue along the course of rising personal debt – which many of us do not – then by no means should those who have bad debt be allowed near any type of credit card.

A credit card loaded with money is not unlike a loaded gun – when in the hands of someone who has bad credit. It is asking for trouble, and more debt will only build up once the card is ‘spent up’, and the bills have to be paid. Some may say that by allowing those who have ‘bad credit’ a credit card we are not separating them from the rest of society. Society today, is virtually ‘cashless’. That is to say that the vast majority of us use some kind of card – whether it be credit or debit card. This is the way society has moved now, in that there are very few people who still carry around lose change in the pockets.

In order for everyone to feel ‘a part of society’, the argument goes that even those who have bad debt, they should still be allowed a credit card. They are then not separated from the rest of society’, but continue to be a part of the ‘cashless society’. However, this depends upon what type of ‘card’ it is. Those who find themselves in debt can very often apply for a debit card. This acts like a ‘pre-paid’ card in which the owner of the card is always in complete control of their money.

This works by the owner charging the card up with cash from a local store. This they do by taking the card to their local store, and telling the store owner how much they would like on the card. As long as they have the money to pay for the card [example $15.00 cash equals $15.00 on the card that the store owner puts on the card.]

This can be counted as a ‘cash limit’, because of the owner of the card places their own cash ‘limits’ on the card.  In fact it is impossible to get into debt with debit/top-up cards, because the owner is always in control of their own money.  Once the money has run out on the pre-paid card, then the account holders have to charge their cards up again, with an ‘x’ amount of money – which is done at the local store.

The debit card acts in a similar way, to the pre-paid card in that the account holder has to already have money in their bank to charge the card. For example, if you have a debit card, then that is normally connected to your bank account. So, whatever you have in the your account is what will be on your card.

You can use a debit card within any store, as long as there is still money within your account. Once your funds have been depleted in your bank account, then you will no longer be able to use your debit card. Not until you put more money into your bank account [thereby charging up your debit card again.]

This is a great way of always keeping in control of your funds, because you, as the account holder of your debit card, will never be in debt. There are no monthly bills to pay, no APR [Annual Percentage Rate] as there are with credit cards – you pay for your goods there and then, and the money that is on your debit card, is taken straight from the money you have within your bank account because the two are ‘linked’ together. 

These are the two ways in which it could be possible to own some kind of ‘card’ if you are in debt. They are easy to use and simple. As long as you have the funds available to ‘charge’ your card – whether it be debit or a top-up card – then you will always be in control. However, as to credit cards, those who are in debt should not be allowed to own credit cards.

This is because they have a history of ‘bad credit’ behind them. Trust, and what type of payer a person is, goes a long way into a bank or building society deciding whether or not you can have a credit card.  However, in the past, the banks would issue out credit cards [regardless of whether a person was defaulting on their credit.] This would result in a chronic spiral of debt – which was mostly blamed by the banks, issuing out cards to everyone – without doing the proper credit checks.

These days, however, the banks are very loath to issue out credit cards to just anyone. And they will do thorough credit checks to make sure that you can pay back any money they may place on the card. This is why this is a good move, in that those who are already deep in debt, do not need the pressure of more added debt. Therefore, the answer to this title has to be ‘no’. Those who are in debt should steer well-clear from credit cards, and the trouble they can bring.

Below this article is a link which you can click on. This gives you, the reader, some idea of the different debit and pre-paid cards that are around right now. If you are in bad debt, maybe applying for a debit or prepaid card, would be your best answer?  Check out the details below.

Compare Prepaid