In light of recent job losses and record foreclosure rates, more Americans then ever are facing credit challenges. One method that many seek in order to rebuild their credit is through the use of credit cards that are designed to help re-establish a good payment history and in turn, a better credit score.
One option for those seeking to rebuild a positive payment history is to attempt to obtain a no deposit credit card. This is an unsecured card that typically does not require a deposit or collateral. These types of cards are more widelyissued by major banks such American Express, Chase, Discover, MasterCard and Visa.
Banks tend to offer these types of cards for a couple of reasons. The first and foremost is that, because of the nature of the card itself, the bank can justify charging higher interest rates and additional fees than are typically charged with standard credit cards.
Banks know that those with bad credit who are seeking to rebuild their FICO scores have few options. Therefore they make these cards available with low credit limits. This creates little risk for the bank, while allowing those who are serious about rebuilding their credit the opportunity to do so by making their payments on time.
The other reason that banks are willing to extend credit cards to those with less than perfect credit is that banks know that when consumer is able to rebuild their credit history, their buying power increases. They are then able to borrow more money for larger purchases such as cars and home loans. This results in more money for the bank.
Another method of getting a guaranteed approval credit card in order to establish or rebuild your credit is by obtaining a pre paid or secure credit card. Typically, the amount you can charge against the card is determined by the amount of your deposit.For example, if you deposit $1000.00 with the bank, then you can charge up to $1000.00 against the card. These are typically the easiest cards to get due to the no credit check requirement.
| |
|
StarReviews Top 3
Student Credit Card |
|
|
|
|
|
|
|
|
|
|
 |
Either way, the key is to obtain a credit card that will allow you to establish a positive payment history. To do so, you will want to make a small purchase at least every thirty days that you will easily be able to pay off on time each month. For instance, if you stop for gas, by putting the $20.00 charge on the card and then immediately sending in the payment for the purchase, you can quickly obtain a favorable payment history and thus be on the road to rebuilding your credit.
Some of the banks that specialize in these types of cards are Orchard Bank, Millenium Bank and The Aspire Card. All three offer easy approval as well as the benefit of reporting to all three credit bureaus. This is the biggest benefit of all when it comes to raising your FICO or credit score. As always, be smart when it comes to your finances. It's your hard earned money, spend it wisely.
|