Credit Cards To Build Credit – What Your Card Must Offer

Credit Cards To Build Credit – What Your Card Must Offer

If you’re looking for a credit card to build some positive listings on your credit report then you must use caution and fully research the card offer, to ensure that it will provide you with what you are really looking for. Many credit cards that are designed for individuals with a less-than-perfect credit history will masquerade themselves as cards that can fix your credit. The single most important factor you must look for in a credit card to build credit is if it will report to all three of the major credit bureaus monthly. Do not fall victim and apply for a card that only reports to one credit bureau because this will do nothing to improve your other two credit reports. You should already be aware of this but if not you must use your new credit card responsibly. If you use it responsibly then it can create a record of positive payment history and responsible credit use, however it can just as easily create additional bad credit and damage your credit score if you use it irresponsibly. Secured Card v.s. Unsecured Card If you’re unfamiliar with a secured credit card, it is one that you must first make a deposit that is fully refundable, FDIC insured and you are then issued a credit card with a credit limit equal to the amount of your deposit. For example if you deposit $400 then your credit card will have a limit of $400. These offers do carry an interest rate of roughly 10% and you should expect to pay an annual fee of about $50. You must do due diligence because some of these secured credit cards will only report to one credit bureau however there are many offers available that will report to all three bureaus, you need to get the card offer that will report to all three credit bureaus. Unsecured credit cards are where you get a credit card and are extended a credit line. In other words you only have to promise to make payments and repay any money you borrow. These cards will carry a much higher interest rate because it is much riskier lending. If you have not heard a few years ago Congress passed new lending legislation that specifically targeted unsecured credit cards designed for individuals with bad credit. Congress created maximum fees and maximum interest rates and essentially dissolved the unsecured bad credit lending market. There are no unsecured credit cards for individuals with bad credit available today. Instead we have seen the banks almost instantaneously find a way to sidestep new government regulation and continue to lend money to individuals with some past financial mistakes on their credit histories. The banks were able to sidestep the new lending laws by offering a partially secured credit card. In other words you must make a deposit to secure your account, and then you are extended a credit limit of more money than your initial deposit. If Congress had problems with unsecured credit cards for poor credit prior to passing their new laws, they must be in uproar about the partially secured credit card offer. The most popular of these cards charges you over 35% APR, and up front $75 fee, a $95 processing fee, and an additional $7 monthly fee. These new partially secured credit cards do not receive our seal of approval and instead we encourage you to get a fully secured credit card. These cards have minimal fees and you can deposit as low as $300 and get issued a credit card with a $300 limit. A secured card offer is a much more effective method of using your time and money. Make sure you read all the fine print and know exactly what you’re applying for before you submit an application for any card offer. —— For more about credit cards to rebuild credit and for a review of how the orchard bank secured card works and can be used to potentially build positive marks on your credit report visit us, you can also call 1-800-483-0256 and get a free credit repair consultation today.

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