July 24, 2009
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Finding a Good Credit Card Deal, Pt.3
First Time/Student/Bad Credit; Building Credit.• Do Not accept an offer from a telemarketer guaranteeing credit cards. This is nothing more than a scam; they charge you a fee and run away with your money.
• Compare fees, interest rates, and deposit needs.
• Check to make sure the credit card company reports to all three of the major credit reporting bureaus to assure future creditors will have access to your good payment history.
• Ask the credit card company if they report the account as a "secured" account. This type of reporting is a red flag for future lenders. You'll want to pick a company that does not attach the stigma of a secured card to your credit report.
• Look for a secured credit card that pays interest on your deposit and ask how long the lender will hold onto the deposit if you should close the account.
• When you have proven to be financially responsible and have succeeded in building up your credit, your lender will likely issue an unsecured credit card with a low credit limit. You'll want to cancel the secured card that carries higher fees and interest rates.
• Credit card companies offer a variety of interest rates and deals for unsecured cards. As a new user or one rebuilding your credit, you'll most likely have to pay a higher interest rate and annual fee. However, before canceling that secured card, move to the next group and compare regular cards.
You can never protect yourself enough when it comes to building a good credit history. With the recession and high credit card defaults, banks have suffered huge loan defaults. Securing credit has become more difficult and even the consumer with a good credit history who have paid their monthly bills consistently on time have felt the wrath of these losses. Protect yourself, become financially responsible.