Q: I would like to rebuild my credit in 2013. What are the best second chance credit cards?
A: If you have a bad credit history and would like to have a second chance at rebuilding it, then the best place to start would be with a secured credit card, which you open using a security deposit. Many of the secured cards on the market offer the following benefits:
100% Guaranteed Approval: You can have the worst credit history known to man and still get approved for a secured card, as long as you meet the bank’s basic guidelines such as living in the United States, having a Social Security number, be 18 years or older, etc. Approval is not based on your credit history.
Reports To Credit Bureaus: All the good secured second chance credit cards will report your account to the bureaus each and every month. After your first billing cycle closes, the account should show up on your credit report 30 days later.
Treated Like a Normal Credit Card: Most secured cards will have no distinguishing marks or words that identifies them as being secured. Typically, secured cards gets reported to the credit bureau as a regular credit card.
You Control The Credit Limit: With a secured card you can control the credit limit, which is typically the same as your security deposit. So these are a great card because they give you the ability to start off with a high limit.
Learn more, check out these cards for credit rebuilding
A secured second chance credit card can be a stepping stone to bigger and better things, if you manage it properly. If you pay your bill on time each month hopefully before the first year is up, you will be able to qualify for basic unsecured cards that are a step up, such as an entry-level gas station card or department store card, both of which can help you rebuild credit.
When comparing secured cards here are some things to consider:
Fees: As you can probably guess fees are often the case when it comes to these types of cards. Of course it’s never fun to pay for something, but it’s a small price to pay for a tool that has the potential to help rebuild your credit. Keep an eye out for application and processing fees (not all charge them).
Features: Consider cards that come with features to make account management easier, like free customer support and online bill pay.
Easy Account Funding: If you don’t have a bank account and can’t write checks, then this part is especially important. In addition to check payments, some cards allow funding and bill payment using money order, Western Union, and wire transfer. Look over the application to see what’s offered on the card you’re interested in.
Manage your “second chance” card responsibly and before you know it, your credit score should be on the up and up!