exchange for the
larger part of the debt being written off. Others entered into
private debt management agreements with their creditors which
enabled them to pay only what they could afford but which retain
the creditor’s effective hold over them until such a time
as repayment is made in full.
In all of these three
models the person whose debt it is will invariably have earned
a bad credit rating which will effectively debar him or her
from obtaining credit for many years to come, even after the
bankruptcy is discharged or the IVA is settled.
One way to help repair
bad credit history is through the acquisition and use of “bad
credit credit cards”. The idea behind bad credit credit
cards is to give the holder a second chance to demonstrate an
ability to manage finances properly. There is often no actual
ongoing credit involved, the cards simply ape the whole ethos
of credit card use and purchases are settled in full in each
time. It effectively puts the one time bad debtor back on the
radar as somebody who may at some unspecified time in the future
be trusted with a “real” credit card once again.
Some bad credit credit
cards do actually make a small amount of credit available, although
the limits tend to be low and the APR (Annual Percentage Rate)
high. Once again they are worth having, especially if one is
able to pay them off in full at the end of each month and thereby
avoid having to make interest payments.
they are a useful tool; even if one has no intention of ever
seeking credit again it is nice to have the option available
in case of emergency.