Without a credit card,renting a car, procuring a hotel room reservation or buying an airline ticket can be very challenging.
People with good credit usually have no problem getting a credit card of their choice. However consumers with poor credit histories will often face more difficulties and obstacles. Fortunately, there are some strategies that consumers with a poor credit history can take advantage of in order to secure or obtain a credit card.
Your first step should be check with the bank you currently are doing business with. They can easily check to see how responsibly you manage your accounts. Go to the branch manager. Ask questions about credit cards and what the bank has to offer. Find out what your credit score is. Your credit is measured in a rating system by a term called FICO score. What is considered a good score?
Scores in the 600 range are considered good or regular. Most lending institutions consider a score of 700 as excellent, while scores lower than 600 are considered to be at a high risk. It is often easier to get a credit card from a financial institution with which you have an existing relationship. Offers that come through the mail or an online attempt may present more challenges.
Ask the bank personnel how to obtain a secured loan that is attached to a credit card. This is one of the most practical steps to take in the right direction. It is an effective way to jump start or to re- establish your credit. A secured credit card is a credit card that requires you to deposit money into your bank account to which your credit card is attached. Your spending is therefore more manageable and controlled.
Credit Limit Equals Deposit
The credit limit of the card is equal to the amount you have on deposit in the bank. This process prevents you from spending beyond your means while protecting the bank if you do not pay the balance you owe. Some banks have a minimum requirement of $200. There are maximum limitations imposed.
Compare Secured Cards
In your attempt to straighten out your credit situation be sure to shop around. Obtain several applications for different secured credit cards. There are many offers for the consumer who does not have perfect credit. Do some comparison shopping before making a decision.
Establishing Good Credit
As you borrow the money and establish your new credit, your invoices will arrive as well. Your level of commitment to establish your credit is now in your control. The wisest choice you can make is when the bill arrives pay it off as quickly as possible. This shows the lender your trustworthiness. Paying your bill on time month after month, over time, will help you improve your credit history. Eventually, you will qualify you for an unsecured credit card.
Local Store Credit Cards
Many people have used credit cards at local stores or vendors as a way to rebuild their damaged credit. The local consumer wants your business and for this reason they make obtaining a credit card from a store easier to be approved. If your application is accepted, make small manageable purchases only with the goal to build up your credit.
Gas Station Credit Cards
Obtaining a credit card from a gas station is another excellent way to begin rebuilding your credit. Gas station cards are often easier to qualify for and your spending is very much limited. Your can track and control your gas purchases very easily with a credit card from a major gas company.
Major Store Credit Cards
Even major stores such as JCPenney and Sears or Kohls can often approve a credit card easily. You may start off with a low credit line but if you make timely payments the line of credit will gradually increase. When you pay your credit card bill, at the very least make the minimum payment each month. Your goal should be to pay off the balance in full to avoid further interest payments and fall back into a pattern of acquiring debt all over again.
Master Card and Visa
Major credit cards such as Master Card and Visa have programs that will help a person with a lower credit score to reestablish their credit. They are eager for new customers. Do your online research and you will certainly find a credit card that will fill your specific needs.
Prepaid Credit Cards
In the unique circumstance that you cannot obtain a credit card for whatever reason, a prepaid credit card can be the perfect solution. Stores such as Walgreens and many more offer a prepaid credit card which can be rechargeable. They have a service fee or an activation fee to load the card but you can determine the amount of money that you desire to be added to your card.
Benefits of a Prepaid Card
When you obtain a prepaid card you are in essence circulating basically your own cash through a credit card while controlling the amount you spend. The prepaid card can work for you in the long run while you work on establishing your new line of credit . There are very attractive offers made available to one who wants to acquire a prepaid credit card now.
If you own either a checking or a savings account, you no doubt already have a debit card that can be used to make purchases with the funds from either of these accounts. While you are trying to get control of or manage your credit score, the debit card system works out well because these transactions will not have an affect on your credit score ratings. The prepaid card can work for you in the long run while you work on establishing your new line of credit .
You can load as little as $20 or up to $ 500 on a prepaid card. This is an excellent way to control your expenses. The card can provide backup security in the case of unforeseeable events or can even help in managing the spending of a student away from your home.