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Rebuilding Credit Cards
The primary goal for anyone with bad credit is to look for a credit card for bad credit, because these rebuilding credit cards can actually help you improve your credit ranking over time.
Below is a simple comparison of some of the more popular credit cards for rebuilding credit. Review this chart and choose the one that matches your needs.
|Card Name||Credit Needed||Card Type||Rewards||Intro. APR||Pur. APR||Annual Fee||Bal. Trans. %||Notes|
|Applied Bank Secured Visa Gold||None, Poor, Bad||Low APR; Secured||No||N/A||9.99% (NV)||$50||N/A||Reports to 3 credit bureaus|
|Barclaycard Rewards MasterCard
||Bal. Trans.; Low APR; Rewards
||0% - 6 mos.
||0% - 6 mos.
||2pts/$1 on gas, groceries, and utilities; 1pts/$1 otherwise; may use points like cash
|First Progress Secured Platinum MasterCard||None, Poor, Bad||Guaranteed Approval; Secured||No||N/A||14.99% (V)||$39||N/A||Reports to 3 credit bureaus|
|Visa Platinum from Credit One Bank||Poor; Fair||Unsecured for bad credit||No||N/A||23.90% (V)||$75-$99||N/A||Annual fee payable thru equal installments; free monthly credit score tracking|
There is only one way to get good credit after it has been damaged—rebuild it. Even if you have derogatory marks on your credit reports, like collections, repossession, bankruptcy, or even foreclosure, those items will eventually fall off of your credit report within 7 to 10 years. And while your credit score will automatically increase as this negative information gets older, this process is necessary but not sufficient to achieve good or even excellent credit.
The best way to establish good credit is to add new credit, in the form of unsecured credit cards or secured credit cards. Adding new credit is advantageous for two reasons: first, a new line of credit will lower your overall utilization rate, thus increasing your score; and second, it gives you a positive credit record upon which you can build. As long as you use your new credit wisely (i.e., don’t keep a balance, or if you do, make sure it’s less than 30 percent of the limit, and pay on-time every month), each month you’re adding good credit history to eventually replace the poor habits of the past. Finally, when considering a credit card for rebuilding credit, it’s important to find a credit card for bad credit that reports to the three major credit bureaus; otherwise they may not be reporting your positive usage, meaning your credit score will not increase.
Additionally, many consumers complain about the high fees associated with credit cards for rebuilding credit, and the lack of rewards incentives. Unfortunately, it’s true that these cards do not offer many of the promotional incentives of traditional credit cards, are often possess higher fees and interest, and lower credit limits. But this is simply the nature of the rebuilding process. In most cases, rebuilding credit cards should be used for small purchases only that can be paid back within a few days, not large purchases that are repaid over time. Consumers who use the use their rebuilding cards in this way find that their credit scores increase faster, ultimately allowing them to qualify for credit cards with better interest rates and perks.
Remember: The credit card details contained in this comparison chart are considered accurate as of 6/29/2012, and may not be accurate after this date. Since interest rates and offers change frequently, it’s always best to read all current Terms and Conditions agreements for any card you are considering. These can often be found on the credit card application, a link to which you may find on this web page.