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Subprime credit cards aimed at vulnerable consumers

It seems that credit card companies are always finding new ways to lure customers into agreements with unfavorable terms. According to a study conducted by the financial website NerdWallet, there has been, of late, an effort on behalf of some companies to target consumers that have low credit scores.

A low credit score tells companies that a potential cardholder has had debt problems in the past. As such, some companies are willing to issue so-called "subprime cards" to customers that have a record of credit difficulties. But these cards have higher interest rates.

Moreover, subprime cards typically come with written agreements that are substantially longer than mainstream cards. And the terms of these agreements are worded for college-level readers, while most of the customers who receive the cards do not have a college education. In other words, much of the fine print can be difficult to decipher, and many customers may not fully grasp what they are getting into when they agree to the terms of these cards.

A credit card that has fair, understandable terms can be a very useful financial tool. However, some credit cards, such as the subprime cards discussed in this post, can do far more harm than good, especially to those who are already struggling with debt.

If your credit card debt has reached unmanageable proportions, it may be time for you to consider the advantages offered by personal bankruptcy. Both Chapter 13 and Chapter 7 bankruptcy can provide you with the opportunity to effectively halt the demands of credit card companies for payments and can help you reset your finances. A Texas bankruptcy attorney can assess your situation and guide you through the process that gives you the best chance at a brighter financial future.

Source: CBS News, "As subprime credit cards gain popularity, alarms ring," Aimee Picchi, Aug 23, 2016

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