If You Had No Credit, Would You Accept A Pitiful Credit Card Offer?

Mike ruined his credit in his teens but now is tempted to get back in on the plastic parade by accepting a not-so-hot pre-approved credit card deal with a colossal annual fee and interest rate.

Check out his story and be his Fox Virtual Manager:

OK, so here’s the back story. I have really [shoddy] credit, at least, last time I checked I did. I was irresponsible in my late teens, and have a number of charge-offs on my credit report. They’re about to drop off in a year or so, and I’m starting to think about rebuilding my credit.

I’ve been meticulous with my car payment, phone payment, and everything else that can’t be auto-billed. Actually, I’m due for a credit check, but haven’t done it in a while.

Today in the mail I got one of those “Pre-Approved!” cards from First Premier Bank. It’s got a pretty high annual fee $175, a low balance and a horrendous interest rate of 24%. My initial reaction is to shred it and forget it. However, I don’t get these things very often, and though I’ve gone without a credit card for a very long time, there are times when this stings me. For instance, I get paid in arrears for expenses related to my work. Things like parking, travel, etc… I have to pay out of pocket and get reimbursed for at the end of the month. With a credit card it would be pretty easy, and much less of a financial burden on my part to deal with this. Also, things like renting power equipment, cars, etc are much easier with *actual* credit cards.

So, am I right in thinking that as long as I pay the balance off month-to-month, I won’t incur any interest charges, and that the annual fee (which is taken out in monthly installments) is maybe worth it in order to have a check mark in the “good” column of my credit report?

What do you think I should do? Activate it or run screaming from it?

Let’s bring it to a vote, Consumerists.

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