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Further, you might also have a lower overall credit limit, which can be problematic for two reasons. First, you won’t be able to have as much flexibility in your credit card spending, which might make things difficult financially if you’re having cash flow problems. Second, it will take less spending to max out your credit card, and because credit utilization is such a large part of determining your credit score, that can have a big impact on your rating if you don’t make a great effort to keep your balance low every month.
Of course, when you get a credit card designed for people who have bad credit, you should really try to use it sparingly. Think of this account like training wheels so you can develop better borrowing habits, improve your score, and move onto a card with more beneficial terms. The best way to get your score into better shape is to continually make sizable, on-time payments into your existing debts.
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