Buying a Car with Bad Credit

by : Keith Londrie

Many people with bad credit wonder how they would be able to get a new car since it is almost impossible to get a car loan from the bank. Of course there are other financing institutions that might be able to help and although their conditions might not the best ones this is still an option.

Another way round the new car financing maze is to apply for a 0 APR credit card and use it to repair your bad credit, than you can easily apply for a loan.

First of all let's explain what is a 0 APR card. APR is a financial term meaning Annual Percentage Rate. The APR is simply the annual interest rate or the interest rate that would be charged to your account over a year.

Getting a 0 APR credit card is not that difficult even if you have bad credit history. When applying for this kind of card be alert as the conditions might not be as sweet as they sound. Most of the banks offer credit cards with no annual interest rate for certain period of time (usually for six months or a year only). Than the agreed annual interest rate comes into effect and it might be huge. Some banks apply 0 APR for new purchases only or for transferred balances only. Make sure you have read carefully all conditions and charges applicable after the zero APR expires before signing your credit card contract. Than decide what to do with the card in accordance with the terms.

If you have 0 APR for purchases only use the card to buy the car. If the zero ARP applies to transferred balances only, transfer the debt to this card. Make a proper plan to see if you will be able to repay the new debt. There is absolutely no point in taking another card if you think you will be unable to make the repayments as this will just swallow you deeper into the debt mud.

Taking a 0 APR card is beneficial only of you do the calculations right. If you are unsure and feel it is too risky to try it, don't. The other option is to arrange a meeting with a bank representative and ask him all the questions that bother you. Usually banks are quite helpful as it is in their interest to get the money you owe them, so they will help you make a plan and recover your debts and your credit score.