Credit Cards to Build Credit
Experiencing financial hardship and seeing your credit take a turn for the worse is a stressful and frustrating time for anyone to endure. Many people think they won’t be able to recover or qualify for credit ever again.
The good news is that is simply not true; with the right plan you can rebuild and eventually restore your credit rating.
Did you know there are card issuers that offer credit cards to build credit specifically for those who have bad ratings or even filed for bankruptcy?
These types of cards are designed for high risk individuals and even though the interest rates are much higher it gives you the opportunity to start re-establishing your credit.
To minimize the risk you present to a card issuer you can always apply for secured credit cards to build credit.
With a secured credit card your deposit equals your credit limit but it doesn’t work like a debit card. The money you have on deposit is untouched and is simply security in case you default on your payments.
The larger the deposit you can put down the greater the credit limit your card will be. Best of all the higher the credit limit the better it reflects on your personal credit files.
Once you have credit cards to build credit it’s important to keep the account active by using it to make purchases. Keep the debt to credit utilization low which is typically no more than 30%.
You also need to pay your bill ahead of schedule and if possible increase your deposit at least once every six months. Remember, your goal is to eventually qualify for unsecured credit cards and it all starts with establishing a solid payment record on your files.
After six months of on time payment history you can also request an account review to see if you qualify for a credit limit increase with no additional security deposit.
Here are the top four credit cards to build credit:
- Full-feature Platinum MasterCard secured credit card
- No credit history or minimum credit score required for approval
- Monthly reporting to all 3 major credit bureaus to establish more credit history
- Quick & complete online application
- Guaranteed approval
- Monthly report all all three major credit agencies
- Choose credit limit from $300 to $2,000
- Reports to major credit bureaus
- Get your card in as little as 5 days
- Choose credit limit from $300 and $2,000
- Reports to major credit agencies
#4 USAA Secured Credit Card
- Your USAA 2-year Variable Rate CD is your security deposit
- Can establish a secured credit limit from $250 to $5k
- Low APR of 9.90%
So when it comes using credit cards for building credit I encourage you to use a secured credit card, make a deposit, make regular purchases, pay ahead of time, keep revolving debt low, increase your limits and request a review after six months.
Ready to repair, restore and reclaim your excellent credit scores? Submit your name and email below to receive my FREE course ‘7 Steps To Superior Credit‘ ($497 value) =>
About the author
Marco Carbajo is a business credit expert, author, speaker, and founder of the Business Credit Insiders Circle. He is a business credit blogger for AllBusiness, a subsidiary of Dun and Bradstreet and author of “Eight Steps to Ultimate Business Credit” and “How to Build Business Credit with No Personal Guarantee.” His articles and blogs have also been featured in the SBA Community, American Express Small Business, Business Week, The Washington Post, The San Francisco Tribune, Scotsman Guide, Alltop, Entrepreneur Connect, and Active Rain.