Credit Cards for Building
Credit - Understanding The Opportunities
If individuals have
Credit, how will they
know which Credit Cards
to pick when there are so many possibilities?
The information below will discuss a couple types
of cards to give you a helpful understanding
of the advantages of each:
Cash Back - With a Cash Back
card, customers are rewarded with a reimbursement equivalent to
a fraction of their purchases. For instance,
if an applicant is approved for a Cash Back
solution that provides five percent cashback
on groceries, fuel, and pharmacy
items, as purchases increase and rewards accumulate, they can be redeemed. If you
use one hundred and fifty dollars in fuel, food,
and drugstore purchases every 5-7 days, by
the end of a 12-month period, $390
in rebates would be ready to cash out.
Rewards Points - Instead
of providing money back, some lenders
present customers with points programs. Customers receive
points for making purchases. Every time the card is used, the rewards
accumulate. After a certain amount of points add up they can be cashed in for perks like
free hotel stays, gifts, subscriptions, and more.
Always check to see if the Credit Cards
for Building Credit you are considering offers
Gas Bonuses - Lenders
can be sensitive to the cost
of fuel and will reward
people for their purchases by giving them a free
gas card. As the card is used, points are accumulated. Once a certain number of points are earned you are eligible for a
free prepaid fuel card. The cool thing is, with some cards gas points are actually accumulated even
while making gas purchases.
Points Redeemable for Free Hotel Accommodations, Car Rentals, or Frequent Air Travel Miles - When these cards are used, free travel points are earned. Once a specified number of points are earned, they can be redeemed for free travel accommodations. Business travelers find these kinds of programs to be very beneficial.
0% Promotional Interest Rates - In the beginning when these credit cards are utilized, there are no finance charges that are applied.
The promotional period generally lasts anywhere from six to twelve months.
Smart people use this interest-free period
to move outstanding balances from their current Credit Cards
to one of these and pay the balances off within the promotional period. Making timely payments is imperative.
When a single payment is not received on time, most times
zero percent APR rates go up to a much higher
rate. Customers that are eligible for
Credit Cards for Building
Credit, and have the opportunity to sign up for an introductory period free of finance charges
should choose this option.
Secured Cards to Establish Credit - People with a secured card
would put a specified amount of cash in an account specified by the secured card issuer.
This "is what makes it a "" secured card"" ." After the deposit is made a credit card is
sent with a spending limit in
the amount that has been deposited in the account. Each time you swipe your card your available credit is recalculated, low interest
monthly payments are computed, and a bill
is generated. If the card is being used low monthly payments will become due. Secured Cards to Establish Credit
are terrific because they operate like
ordinary credit cards allowing customers
the freedom to book travel accommodations like airline tickets
that usually do not take check
cards. Individuals with bad credit should apply because approval is typically
guaranteed despite your credit profile. However, keep in mind that many
secured card companies report the way you pay your bill
to the credit bureaus. This could be a great
approach to show creditworthiness by showing scheduled
payments no matter if you have Building
credit or not. Once you have paid
a certain number of consecutive timely payments, some secured card companies will approve a higher limit without
requiring an additional deposit.
Reloadable Prepaid Credit Cards - With
a Reloadable Prepaid card, there is no question about the credit limit. Similar to
a conventional account, you put money in and this becomes
the amount that can be used for purchases. When the prepaid credit card
balance becomes depleted, it can be reloaded with more money and used again. These cards
are fantastic for students, they offer the kind of flexibility that debit cards have, and they help people that cannot
acquire a typical bank account.
Approval is normally not a problem regardless of
your credit report and there is
no need for the prepaid company to deal with the three bureaus.
With all of the various sorts
of Credit Cards
for Building credit and
benefits that each of them offer, it is easy to identify the best solution for your situation. Look for
Credit Cards that allow for the most rewards. Remember these things and be sure to
try to keep your purchases at less than half of your credit limit and make more than the minimum payment every month. Prime credit is a terrific
thing to have.
To make certain that you keep developing a super credit score, take heed to these easy rules:
1. Keep your outstanding balance at a percentage of the
card's limit. Simply put, don't
"max out". Always keep
a balance that is about half
of the available balance on any
Credit Cards for Building Credit.
2. Do not make late payments. Even if the minimum is the most that your budget will allow, it is better to make that small payment on time then it is to try and pay more at a later date. If the bill is paid 30 days after the due date, it must be posted to the credit reporting agencies. This has adverse affects on the consumer's FICO profile. Not to mention customers may also be assessed a rising interest rate as a consequence of just this one tardy payment. Hence it is advised that you make this bill payment a financial priority.
3. Pay the whole thing off every quarter.
If the card is used a lot, try to
pay it all off at least once a year. Afterward, it is okay to
make more purchases and pay it back down to zero again after a few months, and don't stop this habit.
This cycle illustrates to the lenders
that you will be a great customer. You could also be rewarded with
a lower rate, a higher limit, and a higher credit score.
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