I know many people want to escape from their bad credit history and make the credit reports shine again. There are a lot of things you can do in order to raise your credit score. You should avoid late payments and missed payments, you must always pay at least the minimum amount on your credit card and you should try to build a good credit history from now.

However, in order to rebuild your credit, you must obtain financing. But since you have bad credit, obtaining finances can be extremely complex. A credit card and non-traditional unsecured personal loans are beyond your reach if you need to find another source of funding, a lender willing to lend money to someone who has a poor credit rating. I will tell you more how to get back in course in my next article so stick with me.

Always try to use your savings rather than using your credit card. There’s no point on earning interest on money in a savings account if you end up paying interest on your credit card. Credit card interest rate will always be higher than any savings account or even term deposit. This is especially true if you find it hard to even make the minimum repayment each month.

If you simply prefer the convenience of having a credit card, consider getting a debit card instead which can be linked to your existing savings account. Most major banks now offer VISA debit cards as part of there product range. Also, be wary of rewards programs, and consider the actual cost of the item in dollar terms before signing up with them. For instance, if you need 10,000 points for a flight and the flight can otherwise be purchased for $100 cash then you know that each point is only worth 1 cent. Also, calculate how much you have to spend to earn these 10,000 points. If you only get 1 point for every 2 dollars, then your rewards program is only giving you back 0.5% of what you have spent. If there is an annual fee for the rewards program, it almost certainly isn’t worth joining.

Check the interest rate you are paying on your card. If you have trouble paying the entire amount off by the due date (not just the minimum), you are probably better off with a low-interest rate card instead of one that offers interest-free days. Often the percentage rate difference between these cards is 5 - 9%. In the long term this sort of saving can make a real difference to you.

It is true that credit cards are convenient, and can indeed make things easy for you if used correctly and paid off by the due date. If however, you end up paying interest on some or all of your credit card balance each month, then you would certainly be better off without one.

If you are one of many of us that have several credit cards and all of them are starting to hit their limit, it may be worth looking at moving some or preferably all of them to a new card.

Most banks and financial institutions offer special interest-free or reduced interest periods from 3 months to 12 months on new cards. Usually these rates are only available on transferred balances, not on purchases which is just fine. Now assuming that the new card’s regular interest rate is less than you are paying now, you’ll be much better off to move the balances over.

This is usually much easier than applying for a consolidation loan as banks generally will issue a credit card more easily than issue a personal loan. Given that for the reduced interest period you repayments will also be significantly reduced, you have an opportunity to pay down more of the outstanding amount during this period than you otherwise would.

Once your interest rate has returned to normal, there is actually nothing stopping you from moving the balance again to a different card, also offering a cheaper rate! Theoretically you could go 2 or 3 years with paying no, or less than 3% interest - which could save you hundreds, or even thousands of dollars.

If anyone has actually done this more than once, please post your comments.