Credit cards for rebuilding your credit |
By David Pilley on December 26, 2011
.jpg.aspx) There are two main reasons why your credit may be bad. One: You have too many negative items. A late or missed payment, a charge-off, or having filed for bankruptcy in the past seven years can put your score at an unenviable place. Two: You don’t have enough history. You may be fresh out of college with student loans as your only form of a credit line. Future transactions, like car loans and mortgage, may require a good credit score for approval, and you can build your history by getting a credit card. Not just any card, mind you. If you make too many inquiries about new credit in a short period of time, your credit score may get hit, so you need to have a good idea of what you want. Here are a few options you can consider to help improve your score.
Orchard Bank. Everywhere I looked, the name Orchard Bank kept appearing. Orchard Bank is available with either Visa or MasterCard. Its APR typically ranges between 14.99 and 19.99%, a pretty low number in regards to a credit card. Its annual fee ranges between $39 and $59, which is on the high end; however, if you continually make timely payments and keep your balance low, you can ask to have it eliminated. Orchard Bank reports to all of the three major credit bureaus on a monthly basis, and this is a big plus when it comes to improving your credit score.
Capital One Secured. Secured credit cards are suggested over unsecured cards because they require a security deposit, and their credit limits are usually smaller. Capital One offers a Classic Platinum and a Standard Platinum secured credit card. Classic Platinum may offer a zero-percent introductory rate, but after the grace period, it will go up to a number between 17.9 and 22.9%. (The rate will be 24.9% on cash advances.) Standard Platinum will have a 24.9% rate, but its annual fee ($19) is much lower than Classic Platinum ($39), and it can be waived after the first year. Its minimum credit limit is $300, and I would try not to go much higher than that.
First Premier Bank and Aventium Classic (both MasterCard). These two work in similar fashion. You must have a checking account in order to get either card. If you qualify, a $95 deposit will get you a $300 credit line. If you close your account with a zero balance, you will get your security deposit back. Unfortunately, these two cards may have an exorbitant interest rate (in excess of 50%, in some cases).
The keys to rebuilding your credit are understanding terms and making all payments on time. Make sure you are also able to pay for life’s necessities. If you have student loans, focus on paying off this good debt first before getting a credit card that may turn in to bad debt.
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