3. Secured Credit Cards
Secured credit cards work like a normal credit card; however, a lot of people avoid secured credit cards because they require you to put down money upfront that acts as your credit line. Any purchase you make comes out of that line of credit. Should you default on your agreement, the bank has your deposit as collateral so they’re covered.
The benefit of owning a secured credit card is that it builds credit. Secured credit cards report to the three major credit bureaus and will help improve your credit score when used responsibly. Over time, many secured credit cards allow you to change your account to a traditional, unsecured credit card and will subsequently refund your deposit. You must keep up with your payments for that to happen, but it’s a great alternative if you simply cannot get approved for an unsecured credit card. Below are some great options to consider.
Don’t worry if you are having difficulty qualifying for a traditional credit card due to a lack of credit history or poor credit history.
"If you are willing to put forth a little cash and a little effort, you can get a card to help you build and/or repair your credit score."
- - Co-signer is responsible for charges on the account
- - Co-signer’s credit score determines the credit limit
- - Unpaid balances will default to the co-signer
- - May be able to get approved with no credit history
- - You will likely have a low credit line to start
- - Will allow you to build your credit without putting your own money down first
- - You are required to put down money upfront
- - Helps improve your credit score when used responsibly
- - An alternative if you cannot get approved for an unsecured credit card.