Banks began issuing credit cards for their own benefit, as well as the benefit of the people. With credit cards, people could spend money at their own descretion as they would have to pay the bills at the end of a particular term, probably on a monthly basis. This gave people enough time to make their payments. At the same time, this scheme was beneficial for the bank, as it earned the interest on the amount people spent. But many times people would spend money at their own descretion, but could not make the repayments in time. A person earns poor credit ratings if he continues this non repayment of his credit card several times. Such people enter into the bad books of the bank and thus find it difficult to convince the banks to issue them more credit cards. But recently, many banks have started issuing credit cards with poor credit rating.
There can be various reasons of earning a poor credit rating, the main reason being continuous late payments of the credit card bills. Other major reasons for poor credit rating are forgery or other non-payment of bills, bankruptcy in the near past, etc. Also inability to repay loans in the stipulated time can lead to poor credit ratings. The banks keep track of all this. Having any of these features in your financial records makes it difficult or sometimes impossible to get credit cards. One should thus avoid having poor credit rating by making sure that they are not defaulters in any of the services that the banks provide. By making sure that the credit card bill payments are made on time, one can also get many favorable offers from the banks for being a respectable and genuine customer.
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