Having a credit card is one of the more convenient things that we may experience in life. It provides the opportunity to purchase items and pay for them later, as well as a chance to build a good credit score. Unfortunately, there are many people who lack the credit to get one of the better credit cards, either because of financial difficulties or because they have not yet built up the credit necessary to qualify. For those individuals, finding credit cards to build credit is the best opportunity available.
When it comes to credit cards, there are so many different options available that it can sometimes get overwhelming. For individuals who have extremely good credit, opportunities for low-interest rate, little or no annual fee, points and money back programs and many other features are available. For those who are lacking credit, however, credit cards may be somewhat limited in what they have to offer but they do offer the same thing, and that is the ability to purchase items and pay for them later.
Here are two different options for credit cards to build credit that can be incorporated by most people.
Bad Credit Credit Cards – When somebody is dealing with a credit score that is borderline because they have had some rough financial spots in the past, it may still be possible to get an actual credit card. There are a number of credit card companies that deal specifically with those who have bad credit. The credit line may be somewhat small and the interest rate or annual fee may be higher but as long as the monthly balance is paid on time and in full, it can be used while at the same time, building credit in the background. Some of these credit cards also require an initial, upfront deposit.
Secured Credit Cards – There are also a number of options available for secured credit cards and these can also be beneficial for those who are lacking credit or dealing with bad credit. The available credit on the credit card is secured with an initial deposit that is held for as long as the credit card is in use or until a time that enough credit is built to switch it over to a regular credit card. Although these credit cards do require an upfront investment, they work exactly like a regular credit card and can be used for renting cars or anything else that a credit card can be used for. They also report to the credit agencies, so it’s a good way to build credit.
Some people wonder if it is possible to build credit by using a prepaid credit card. This type of credit card is different than a secured credit card because the deposit is diminished as the credit card is being used. It doesn’t provide credit, it provides a way to use the money that is deposited. These type of cards can be convenient, but they don’t build credit and can not be used for car rentals or anything else where a true credit card is required.