It is becoming increasingly difficult to go through life without at least one credit card. However, for those with a bad credit history, getting approved for a regular credit card can be next to impossible. For those who are ready to shed the yoke of bad credit or bankruptcy, a secured card could be the answer.
Rebuild Your Credit
A secured credit card is an easy way to begin rebuilding a shaky credit standing. A secured card requires the user to place a cash collateral deposit that serves as the credit line for that account. The required deposit can be anywhere from $250 to $500, and in rare cases, the limit will be higher. If your payment history is good, the card issuer may increase your limit in the future. Before signing on the dotted line, there are a few things of which you need to be aware.
Associated Fees
Every secured card charges an annual fee. It is important to read the fine print of the contracts carefully. Many cards have outrageous fees and high annual percentage rates (APR). It will pay for you to shop around before making a commitment to a card. If you are a member of a credit union, this should be your first stop. Many credit unions will waive the annual fees for their members, and sometimes have a better APR than most major banks.
Credit Score
Always ask how your deposit will be handled. Will your deposit be put into an account that will accrue interest? Will you receive your deposit back after a set amount of time? It is also important to make certain that your card issuer will be reporting to TransUnion, Equifax, and Experian. If they do not, then the card will not help you rebuild your credit.
Purchase Power
Buy a few things and make sure that you pay it off in full every month. Use it only to buy groceries or gas. Keep the balance at an amount that you know for certain you will be able to pay off monthly. Eventually you will start to receive offers in the mail for unsecured cards. Again, read the fine print. Choose the card with the best APR and the lowest fees.
If you can handle a secured card responsibly, you will be able to handle the responsibility of an unsecured card. The same rules apply. Use it for a few purchases, and always pay it off in full each month. This will put you one step closer to a better credit rating, and a more stable financial future.
I am just trying to get a little bit of credit so I can stock up on household cleaning and personal hygiene stuff….. I’m not trying to get a lot of money I just need things,