Posted by : Frank Mignosi
In the past few blog posts we’ve discussed the Basics of the Mortgage Qualification Process and What the Fair Credit Reporting Act means to you, the consumer and now I would like to touch on a different subject. What if you have little or no credit and can’t find a lender that will approve you for a credit card? Maybe you’ve paid back all of your debts and are in the process of cleaning up your credit report, but can’t find a lender that will give you another shot. Maybe you’re young and have no established credit. Whatever the situation is for being denied an unsecured credit card there is a solution.
What is a Secured Credit Card?
A secured credit card is basically a credit card and a debit card combined into one. You would have all the benefits of a credit card without a lending institution having to take the risk of fronting you the money.
You pay a security deposit upfront which goes toward your spending limit on the card. Each secured card has different fee’s associated with them so be sure to clarify what those fee’s are before applying for that specific card. The good thing about a secured card is that everyone gets approved!
If you utilize a secured card in the correct fashion it can quickly open the doors to credit worthiness in the future. Here are some tips to help you:
- Make your payments on-time EVERY month. Late payments will not only hurt your credit score, but your pocket as well being that the fee’s are usually much higher than they are with a regular unsecured credit card.
- Make small purchases that you’re sure can be paid off completely when payment is due. A tank of gas, groceries, etc. Don’t run the card up to the maximum spending limit, be cautious with what you are using it for.
- Always be aware of the possible fee’s you can accrue by late payments as well as the annual fee’s associated with that card.
If you stick to the plan, before you know it you will have the credit worthiness needed to get approved for an unsecured credit card. Click here for the secure card we recommend.