Suffering from poor credit and wondering what to do? Don’t worry, you are not the only one in town who has an adverse credit. Millions of Americans face the same problem. Such situations can arise due to medical debts, bankruptcy or even careless spending habits.
If you have a bad credit, you might not be able to apply for a home loan. It also reduces your chance of applying for other loans such as personal loans or car loans. Banks usually prefer to offer credit card to customers who have a fair credit. However, there are other ways of rebuilding your credit history too.
Secured Credit Cards
There are two types of credit cards, namely, unsecured credit cards and secured credit cards. The former does not require any kind of collateral, whereas the latter requires the customer to have cash deposits equal or higher than their credit limits.
A secured credit card is the best way to rebuild credit. It is a way to assure the lender that you are solely responsible for your expenses. A secured credit card is issued only after you make a deposit. Let us look at some of the best secured credit cards.
- Capital One Secured MasterCard – It has $0 annual fee and an ongoing variable APR of 24.99%. With other secured credit cards, your deposit should be equal to your credit limit, but with Capital One, you can deposit as low as $49 and get a limit of $200. First five on-time payments can also receive access to higher credit limits.
- Discover it® Secured Card – It has no annual fee and rewards 2% cash back on purchases up to $1000 spent on restaurants and gas stations. You get to earn 1% cash back on all other purchases. If you keep making monthly payments on time, you can be upgraded to an unsecured credit card too.
- Citi Secured MasterCard–It has a variable APR of 22.49%with $0 annual fee. Your credit limit will be the same as your deposit amount. There is no cash back available and in order to be eligible you cannot have a bankruptcy history for the past two years.
- Open Sky Secured Credit Card–The bank does not have any prior credit checks for you to apply for a secured credit card. It has no application fees and low annual fees. The bank reports your credit statement to three major credit bureaus so it is a good way to rebuild credit.
- First Progress Platinum Secured Credit Card –It has a quick and an easy application process without any minimum credit score. The bank charges a fully refundable deposit of $200 to $2,000 and your credit limit depends on your deposit.
- Unity Visa Secured Credit Card – There is no minimum credit score required and a fixed interest rate of as low as 17.99% is charged. The minimum deposit charged is $250 in order to be eligible for a credit card. You can access your account online and pay bills or check your statement sitting at the comforts of your home.
- US Bank Secured Visa Card – There is an annual fee of $29 with a regular APR of 19.24% and the cash advance APR is 24.24%. It includes a complimentary insurance when you use your card for making car rental purchases.
Each and every secured credit card is different from the other. As a customer, you should carefully compare all the cards in the market and choose the one best suited to your spending habits. Choosing the right card will definitely help you in rebuilding credit. Make sure you pay all your bills on time, doing so will help you to have a good credit score.