Easy Credit Cards to Get
Credit cards can be a valuable tool for establishing, or reestablishing, credit. Students and those new to credit have a greater variety of cards from which to choose, but people with bad credit have several options as well.
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Banks and Credit Unions
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A good place to start is with your own bank or credit union, especially if you have a long history established. Credit unions, in particular, are more lenient with credit terms and more understanding of previous bad credit. Some credit unions will base their decision on your financial history, your income and your credit rating. If two of the three are strong, it might be enough leverage for the credit union to issue you a credit card with a lower limit, typically under $1,000.
Secured Credit Cards
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Secured credit cards are easy to obtain, because the bank or company issuing the card is guaranteed to have the balance paid. The company collects a deposit from you equal to whatever amount you would like for a credit line. Typically, the opening deposit is between $200 and $1,000, but there are companies that will accept deposits up to $10,000. You are not allowed to access the money you have deposited, but you have an equal amount available on your new secured card. As long as you make payments and use the account responsibly, many issuers will convert the card to an unsecured credit card after a set amount of time--usually 12 to 36 months. A secured card looks just like an unsecured credit card and reports to the three major credit bureaus each month.
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Department Store Cards
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There are several stores and catalogs that offer in-house financing in the form of a credit card. With good credit, you can obtain these offers from almost any store. With no previous credit, some department stores are still open to granting credit. Macy's is usually willing to give credit cards to those just establishing credit. For people with bad credit, stores like Swiss Colony, Fingerhut, Seventh Avenue and Masseys will usually grant a small credit limit. The stores might require 10 percent of the order to be paid before they will give credit and deliver the merchandise. The downside to these types of credit cards is that the interest is usually high, and the companies often won't report to the credit bureaus unless you miss a payment. These companies won't help reestablish credit, but they do provide a way to purchase merchandise. Always ask when you apply or accept a card whether the company reports to at least one of the three major credit bureaus.
Unsecured Credit Cards
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Unsecured credit cards are more difficult to obtain because they are based on your credit score instead of being guaranteed by a deposit. If you find your credit isn't good enough for the company where you bank, you can try other lenders who are pretty forgiving of past credit blemishes. These same lenders will usually extend credit to someone without an established credit report as well. Some banks offering these unsecured credit cards include Household Bank, Orchard Bank, Credit One Bank and Capital One.
New Credit
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Once you have received a new line of credit, it is important to make regular monthly payments and to avoid carrying a balance over 30% so that you can build or rebuild credit. It can take 2 years of solid payment history, coupled with carrying a low balance, to improve a bad credit score. For someone new to credit, responsible management should lead to a good credit score within 1 year.
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