How to Find Credit Building Credit Cards
If you can only qualify for credit cards with high annual fees or ultra-high interest rates, that's a good sign you need a credit building credit card. Such cards are called secured credit cards because you deposit a certain amount of money as collateral when you first get the card. The more money you offer as collateral, the higher your credit line will be. Because the card is secured, most card issuers don't do a credit check, meaning if you can write your first and last name, you're virtually guaranteed approval. The best credit building credit cards are waiting for you now. Learn how to find them.
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Instructions
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Search the internet for "credit building credit cards" or "best secured credit cards." Choose a site that offers secured credit cards, and browse through their listings of cards.
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Consider the credit cards found on Credit.com, Bankrate.com, and findsecuredcards.com (links to secured credit cards sections in resources below). When browsing through these offers, watch out for the annual fee and APR, as these tend to be higher on secured credit cards than on standard credit cards. The best credit building credit cards have no annual fee and a low interest rate.
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Decide what you want your credit line to be. The higher the credit line you want, the more cash you need to deposit. Cards have minimum and maximum limits, so choose a card that matches the credit line you're looking for.
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Ask yourself if you want to be able to access your account and pay your bill online, as many cards don't offer this feature.
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Choose between a card with a sign-up fee and a card without one. The best credit building credit cards won't have a sign-up fee.
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For a 0% introductory rate and low interest rate, consider the Public Savings Secured Visa Credit Card. It offers 0% interest for six months, 11.99% after that, no annual fee, and a $79 sign-up fee.
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For a card with a low fixed interest rate but an annual fee, consider the Applied Bank Secured Visa Credit Card. There's a 9.99% fixed APR, an annual fee of $50, and no sign-up fee. If you make a late payment, you pay a late fee, but your interest rate stays the same.
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For a low interest rate, consider the Orchard Bank Secured MasterCard. This card offers a 7.90% interest rate, a $35 annual fee that is waived the first year, and no sign-up fee. A credit check will be performed before you're approved.
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For a card you can convert to an unsecured credit card in 12 months, consider the Wells Fargo Secured Visa Credit Card. The interest rate is higher than many cards at 17.99%, there's an annual fee of $18, and there's no sign-up fee. No bankruptcy within the last 12 months and no unsettled liens are required for approval.
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Tips & Warnings
Make sure the credit building credit card you're considering reports to all three major credit bureaus.
After a year or so of using a secured credit card, you may be able to convert it to an unsecured (standard) credit card. Even if you can't, you should now have a better credit score and be able to get approved for a standard credit card.
For info on how to find and choose other types of cards, check the resources.
Prepaid and secured credit cards are not the same. Prepaid cards are like debit cards, while secured credit cards are like standard cards except with a deposit as collateral.
Resources
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Comments
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Biscuit4u
Jan 10, 2009
Thanks for the thought provoking read.
