Are you looking for a credit card to help build credit? It is key to make sure your credit card will report your account information, monthly to all 3 credit bureaus. There are a few types or credit cards for bad credit available.
Please read the fine print before you apply for and credit card. And take a moment to find out how each type of credit card will work. This way you can make sure you get the best credit card to rebuild credit.
Monthly Credit Bureau Reporting
It is essential that your credit card report your account information to all 3 major credit bureaus, every month. The majority of unsecured credit cards and many secured credit cards will do this. But take time to double check. There are a great number of bad credit credit cards that will report your account information to only 1 of the credit bureaus.
Instead, of all 3. To clarify, instead of reporting your account information to all 3 the credit bureaus. Some credit cards for bad credit will advertise credit bureau reporting. But, will only report your account information to 1 of the 3 major credit bureaus. This is a common advertising tactic that less that reputable credit card issuers will use.
If your account information is only reported to 1 of the 3 major credit bureaus. You will only be building credit on 1 of your 3 credit reports. Instead, you need your account to report to all 3 of the major credit bureaus. That way you can build credit on all 3 of your credit reports with your credit card.
Types of Credit Cards for Building Credit
- Unsecured Credit Card
An unsecured credit card is like a traditional credit card. You are extended a line of credit with only your promise to make payments. This credit card will charge you interest rate or APR%. An unsecured credit card is the best type of credit card for building credit. This is because it will be valued the most on your credit report. However these credit cards carry high fees and high interest rates.
- Secured Credit Card
A secured credit card is exactly the same as an unsecured credit card. The only difference is you must first make a deposit with the bank. This deposit is what secures your credit line on your secured credit card. The amount of your deposit will equal the line of credit you are given.
If you deposit $500 with the bank. Then you will get a secured credit card with a limit of $500. This deposit is fully refundable, as long as you close your account in good standing. A secured credit card will not carry as much value on your credit report. This is because it has been secured by your deposit with the bank.
However, secured credit cards to rebuild credit are very popular tools. If you keep your account in good standing you will be creating a positive payment history on your credit report. This is very important if you are working to build your credit. Please, take a moment to double check your credit card will report to all 3 credit bureaus. A few secured credit cards will only report to 1 credit bureau.
- Prepaid Credit Cards
For a brief time prepaid credit cards and debit cards advertised a credit building feature. You may have seen credit monitoring with some prepaid credit cards. However, because when you use a prepaid card you must first deposit money on your account. You are not actually showing any credit related behavior.
Currently there are no prepaid credit cards to build credit. Or prepaid credit cards that will report your account information to the 3 major credit bureaus. It is always important to review the costs, annual fees, and interest rates before you apply for any credit card to help rebuild credit.
Many people have found it equally if not more helpful to clean up credit report information that is questionable, inaccurate, and in error. This is just as important as building new positive credit items. And if you’d like a free credit consultation call 1-877-418-7596. And for more credit help, and tips with Dan Willis, sign up for our free newsletter.
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