Your First Credit Card

“It’s everywhere you want to be.”

“What’s in your wallet?”

Advertisers make sure we’re aware of the power of plastic long before we’re old enough to carry those credit cards, don’t they?   Even though choosing your credit cards based on ad campaigns is not the right way to do it, the advertisers do get one thing right:  Credit cards can be very powerful tools.  And for young adults trying to select that first credit card, making a careful, educated choice can save you a lot of money, as well as helping you to establish and build a good credit history.

When it comes time to buy a car, get a mortgage, or just rent your first apartment, the better your credit score, the better your chances are of getting that loan at an interest rate that’s far more affordable than if you had no credit history.   (Even more important, in this digital day and age, your credit score can even affect your employment opportunities.)

Potential lenders utilize your credit reports to determine how risky it is to give you a loan.  Will you pay the loan back?  Will your payments be late?  Or, will they all be on time, every time?  Essentially, the lender wants to know if you, the borrower, will be able to pay back the loan.  If your credit is bad, then you may have made some major or ongoing financial mistakes and you may be less likely to repay this loan.  On the other hand, if your credit is good or excellent, then you’ve likely established a history of paying back your debt, and the lender will most likely grant the loan.

Credit cards are effectively short-term loans that need to be paid back within a short grace period.  Getting your first credit card can be difficult, especially if you’ve not borrowed any money in the past, and don’t have much, if any, credit history.  But, how are you supposed to establish and build your credit score if no one will give you a credit card?

One of the best ways to establish credit is to apply for a secured credit card. These credit cards are secured by a deposit that you make when you sign up for the credit card. Typically, your credit limit will be the same as your initial deposit, but that’s where the similarity usually ends.  Just like an unsecured card, you’ll be able to use your secured credit card to make purchases, you’ll make monthly payments, and you’ll even have interest charges if you carry a balance on the card.  All in all, a secured credit card is a great way to build your credit if you’re just starting out.

Another effective way to build a credit history is to become an authorized user on someone else’s credit card.  Often, a parent or guardian will designate one or more of their young adult children as authorized users on a credit card.  This helps the child build credit without obligating them to pay the balance every month.  Just keep in mind that if the person whose account you are authorized to use does not handle the account properly, their mistakes could end up hurting rather than helping your credit.

Typically, establishing credit only takes a few months, then you’ll be ready to select for your first unsecured credit card.  But, before you sign up for the first ad you see, make sure that you do your research so that you choose the right card for your needs.  As yourself these questions:

How will you use the credit card?  Emergencies only?  Day to day purchases so that you can cash in on rewards?   Will you pay in full every month or will you carry a balance?

If you plan to carry a balance on the credit card, what’s the interest rate that you’ll pay on the balance each month?  The interest rate used by credit card companies is the annual percentage rate, or APR. There are cards with variable APRs, which are based on a certain index (such as the U.S. prime rate).  There are also nonvariable APRs, which are usually fixed-rate credit cards. As a beginner, you will usually want a low-rate, nonvariable APR credit card, because knowing your interest rate will give you a sense of how much money you will need each month to pay at least the minimum amount due. A low-rate, nonvariable APR card will therefore help when you create a monthly budget.

Will there be any penalties, fees, or other charges related to the credit card or it’s use?   Read the fine print – the most common fees include balance transfer fees, cash advance fees, fees for requesting a credit limit increase and online or mobile payment fees.  Most credit card companies impose penalties for not paying your bill on time or going over your credit limit.   Choosing the wrong credit card company can result in outrageous fees and penalties that could actually hurt your credit score in the long term.

What about rewards credit cards?  Many credit cards offer cash back for certain purchases, or 0 percent APR for the first six to 18 months, or other incentives.  The low interest cards are great if you’ll carry a balance, just as the cash back is excellent if you use that reward correctly, but make sure that the reward actually fits your spending pattern.  Knowing how to use these rewards can really save you a lot of money if you’re careful.  Just remember, that 1% cash back really isn’t  saving you money if you’re paying 24% interest on the balance you’re carrying every month… don’t fall into the credit card trap.  Use your cards sparingly and pay off the balance as quickly as possible.

Remember, you’re working to build good credit, and you don’t want to get off on the wrong foot!  Your payment history, the amount of credit you use, and the number of negative marks on your credit history all have a large impact on your overall credit score.   

Pay off your balance as soon as you can, limit the percentage of overall credit that you’re using, and avoid any negative marks on your credit history if at all possible. While credit cards are a convenient part of everyday life, they can also be very dangerous if not used responsibly.  Make sure you use your first credit card to establish positive financial habits that will serve you well for a lifetime.

What Are You Doing With Your Tax Refund?

Well, it’s that time of year again!  That’s right, most of us are getting our tax refunds back!

What are you doing with your tax refund this year?  Last weekend, I was out doing my regular Saturday morning grocery shopping, and I happened to stop in the home improvement store to pick up something that I needed to fix something else in the house.  You’d have thought it would be a quick trip – in and out in minutes.  Not so!  The store was packed with people and they were spending money like crazy!  So, I asked a friend who happens to work there what was going on, and she said that people were spending their tax refunds.  Hundred dollar bills were flying around like nothing, she said.  And then I thought about that… if I could afford to do that, would I spend my entire tax refund?  Probably not.

Unlike the people who are spending their refunds on home improvements, vacations to the beach, or something totally frivolous, you could use your tax refund constructively, and pay down a little debt, get a fresh start on a less than stellar credit rating, or even put it into a savings account for a rainy day.

While it’s not quite the same as the instant gratification you’ll get from spending it all on a Saturday afternoon, the long term benefits can be just as rewarding… especially if you see what happens to your credit score after you pay something off or use some of the cash to open up a secured credit card.  Both options will increase your available credit, which will typically increase your credit score!   And a better credit score means better credit options down the line… when it’s time to apply for that new job, buy that car, or even qualify for that new home you’ve been dreaming of!

Interested?  Check out these secured credit cards and use that tax refund right!

Getting a Raise Soon?

Millions of Americans will start seeing a little more money on their paycheck over the course of the next month or so as the effects of the new tax reform act, and the lower tax rate, trickle down to those of us who need it the most.

But have you given any thought to what you’ll actually do with the extra money? Granted, we all love the idea of extra money each month, but if you’ve managed without it up to this point, why not put that money to work improving your credit score? That’s right, that extra money, even if it’s just a small amount can help you improve your credit score.

How can a few extra dollars a week help you to raise your credit score, you wonder? Well, there are a couple of different ways that you can use that little windfall to your benefit.

  1. Put the extra toward the payments on any credit cards that you are carrying balances on. That way, you’ll pay off the balance sooner, save money on interest, and your available credit will increase with every payment that you make.

  2. If you don’t have credit cards, you can use the money to actually open a secured credit card account. Then you simply “pay” the extra to the credit card company each month, thereby building up the security deposit and establishing an amount of “Available Credit.” This will give you “Available Credit” on your credit report and the regular “payments” to your credit card company will help you to establish (or re-establish) your payment history.

Here are some of the best secured credit card offers available now:

Think Getting Credit After Bankruptcy is Impossible?

Bankruptcy literally causes your credit score to bottom out, but you can recover from a bankruptcy if you’re willing to work at it.  In fact, if you handle your finances properly after bankruptcy and start rebuilding your credit as soon as possible after your bankruptcy is discharged, you can recover long before the bankruptcy drops off your credit report.  Truthfully, you won’t see an excellent credit score, but you can build your credit up to the point that you can get a credit card, you can buy a car, and you can even buy a house, as long as you’re willing to do the financial work that it takes to get there.

How quickly you are able to re-establish credit and how much you will pay for that credit depends largely on your behavior after your bankruptcy is discharged.  If you immediately start handling your financial affairs responsibly by paying all of your bills on time, not applying for a bunch of credit all at once, and keeping your balances low when you do get credit, your credit score will begin to improve.

Wondering where you’ll be able to get credit after bankruptcy?  Unbelievably, you may begin to get credit card offers even before your bankruptcy is discharged.  Granted, these offers won’t be from the mainstream lenders that offer the best interest rates, but you will receive offers.  Chances are, these offers will be from lenders that specialize in “subprime” credit cards that target those with less than perfect credit, and chances are, the interest rate will be astronomical and there will be fees attached to the credit card they are offering.  You may even be tempted to pay those rates and those fees just to get credit of some kind.  Don’t do it – that’s not the best way to start!  There are other options.

The first, and probably the easiest, way to get started is to get a secured credit card.  Unlike a conventional credit card, a secured credit card is literally secured by a deposit that you pay when you set up the credit card account.  Typically, the amount of the security deposit will equal the amount of available credit that you have on the credit card.  But, there is a huge advantage to a secured credit card – the interest rates and fees (if any) will likely be far lower than a subprime credit card.

Other than that, it will work just like a regular credit card.  You’ll make purchases with the card, get statements in the mail or online, and you’ll make payments on the balance owed.  And, just like a conventional credit card, the secured credit card lender should report your responsible use to the major credit bureaus, thus starting you on the path to better credit.  (If they don’t report to the credit bureaus, you don’t want the card.)

Many secured credit card companies will even convert your account into a conventional, unsecured credit card account after a reasonable period of time has elapsed.  It all depends on the card you choose, so shop wisely and read the fine print!

The other way that you may try to get started on rebuilding your credit is to consider a catalog shopping or gas credit card.  Catalog shopping cards and gas credit cards are typically easier to get than conventional credit cards, but most of these lenders also report your responsible use to the major credit bureaus, so they make good starting points when you’re seriously trying to rebuild your credit score and don’t have a lot of money to put into security deposits and such.

Fingerhut is one of our favorite catalog shopping companies simply because they do work with those of us with less than perfect credit and because they’re pretty competitive in terms of interest rates, merchandise selection and pricing, and so on.  If you haven’t looked at Fingerhut in a while, you may want to look into opening a Fingerhut Credit Account issued by WebBank.

From past experience, we’ve seen lots of people recover from all kinds of credit setbacks, from multiple bankruptcies, repossessions, and more, but the single most important thing that you must remember when you are trying to rebuild your credit after a bankruptcy is that you must be willing to put in the time and the effort that it takes to get it done.

There will be times when it is discouraging… you may find that you’re turned down by some lenders, but there are lenders who will work with you as long as you’re working at it yourself, and the best way to do that is to PROVE your credit worthiness as soon as you can!

Need a Fresh Start on Your Credit?

Need a fresh start on your credit but can’t get a conventional credit card?  It can be really hard to get a fresh start when you can’t even get a credit card, especially if you’ve had a financial setback… in fact, there are times when it seems nearly impossible!  Relax, it’s not nearly as hard as you think to start rebuilding your credit score.

Of course, the first things you’ll want to do are to pay off as many of the derogatory accounts as possible, and if there are any inaccuracies, make sure that you do everything in your power to correct them – disputing something on your credit report these days is extremely simple.  It can all be done online, in a matter of minutes, and it doesn’t normally take very long for the inaccuracy to be removed. (Check out our credit monitoring page for several free and paid options to choose from!)

Once you’ve cleared up as much as you can on your credit report, then you’re ready to think about rebuilding your available credit and payment history, and again, that’s not nearly as difficult as it has been in the past.  You have two really good options when you can’t get a conventional credit:

Get a catalog shopping card at an online retailer like a Fingerhut Credit Account issued by WebBank.  Fingerhut is probably the best known catalog shopping merchant that you’ll find when you’re looking for a fresh start on your credit.  Unlike a lot of online retailers, Fingerhut really works with those of us with less than perfect credit, not only to give you the credit that you need, but also to help you improve your credit score in the process.  For starters, nearly everyone can get approved for a Fingerhut account just by filling out a simple application, but in the event that you don’t get approved, you may still qualify for a special “fresh start” program that Fingerhut offers (where you would pay a deposit on your first order before it’s shipped).  And you’ll love the ease of shopping at Fingerhut – they have hundreds of thousands of name brand, competitively priced items available on their site, and you’ll know up front what your monthly payments will be.  And the interest rate?  Again… very competitive!   And, most importantly, Fingerhut reports your responsible credit usage and payment history to the major credit bureaus, so you can start working on your credit score while you shop!

Check out Fingerhut today and apply for your  Fingerhut Credit Account issued by WebBank today!


Set up a secured credit card account, like the First Progress Platinum Prestige MasterCard® Secured Credit Card.  Secured credit card accounts differ from conventional credit card accounts in that you put up a security deposit that is normally equal to your initial line of credit.  Then you simply use the credit card exactly as you would a conventional credit card, making responsible purchases, timely payments, and so on.  The credit card provider then reports your usage to the major credit bureaus, and you will begin to see an improvement in your credit score as your available credit and payment history improve.

Most secured credit cards these days offer very reasonable interest rates, low to no annual fees, and some even convert to conventional credit cards over time.  Compare offers to see which one works best for you and get started today!

As with all changes to your credit score, getting your fresh start will take time – but it can be done!

Secured Credit Cards? Why bother with them?

Trying to recover from serious credit problems?  Maybe you’ve never had any type of credit and need to build some fast?  

If you’re in either of these situations, chances are you’re having a hard time getting approved for a conventional credit card, and if no one will extend credit to you, how are you supposed to ever prove that you can handle it responsibly?  It’s like a merry go round that you can’t get off of… you keep trying to get a credit card to rebuild your credit, but no one will give you credit.  It can be very frustrating!  But, there is a way to get an actual credit card and get started on the path to better credit.  And it’s not nearly as difficult as you might think.

A secured credit card is exactly like a regular credit card with one fundamental difference:  Secured credit cards are literally secured by a deposit that you make when you open the account, whereas with an unsecured credit card, no deposit is required up front.

That’s literally the only real difference between the two, but trust me, getting a secured credit card can be one of the best moves you can make if you need to build (or rebuild) your credit history.  Why?  Because most secured credit card providers report both your available credit (which is normally determined by the amount of money you deposit up front) and your responsible use (good payment history, credit utilization, etc.) to the three credit bureaus on a monthly basis, so in just a few short months, you can go from having no available credit to having whatever amount that you choose when you make your security deposit.  You can even increase your available credit simply by depositing more money…there are even secured credit cards available that will eventually convert to conventional credit cards.

All you have to do is sign up for the card, make the initial security deposit, and then demonstrate your credit worthiness by keeping your credit utilization at or below the 30% threshold and making your payments on time every time.

It takes time, but in the end, you’ll find yourself on the road to better credit!

Use Your Tax Refund to Get a Fresh Start!

Want to get a fresh start on your credit this year?  Got a little extra left over from your tax refund?  Why not take just a little bit of your refund and use it to get your credit back on track?  Believe it or not, it doesn’t cost a small fortune to start rebuilding your credit and, even better, it’s not nearly as hard as you think.

And, as if that’s not enough – here’s the real reason you want a secured credit card:

Most secured credit card companies report to major credit bureaus and that is what really matters when it comes to getting a fresh start on your credit… you’ll be building up your credit score while using your new credit card.  

And all it takes is just a small deposit on a secured credit card – so, go ahead, use just a little bit of this year’s tax refund to get a fresh start on your credit!  Trust me, it will be worth it in the long run. Here are a selection of secured credit cards available to you:



Get A Credit Card to help build Your Credit score

Have you had poor credit in the past? Made a few mistakes, wish you’d done things a bit differently?

Well, all is not lost — you can rebuild your credit just like you lost it. It’s simple, and if you’re disciplined, it’s quick and almost painless.

First, what is a Credit Card? The normal procedure is that you deposit an amount of money into a savings account which is in turn security for the Credit Card you apply for. Then, you can use the credit card just as though it were a “normal” (unsecured) card, and when you make your payments on time, you are building your new credit history. It’s a good idea to use this card for regular expenses that you’d normally pay cash for; then using that cash to pay the credit card bill. This shows the credit card issuer that you are responsible and can pay your bills on time. It obviously takes a bit of self-discipline to do this, however; if you’re not good with handling money that may present a problem for you. But practise, as in all things, makes perfect.

Generally, you will find there are application fees and other fees not usually associated with regular credit cards when you try to get a secured credit card.

Some secured credit card programs will allow you to deposit additional monies into your security savings account, thereby increasing your credit limit. Check before applying for a credit card on this. Again, read the fine print! It’s important.

Many institutions, after a period of having made all your payments on time, will release your security deposit to you, thus graduating your card to an unsecured status. Congratulations if this happens to you!

You can build your credit even faster by getting more than one secured card at a time; just make sure that you stagger your opening of these accounts by a month or so each, otherwise you may run the risk of being rejected, and thus harming your credit score again.

After you’ve established credit using a credit card, you will most likely start to notice the amount of low APR credit card deals being offered to you. Make sure you read the fine print, as always, and carefully choose which offers you sign up for.

Different banks and credit card companies have differing amounts that they are willing to allow you to secure; and they all have different procedures, get the one most suited to you.

About the Author: Peter Carville
“You can rebuild your credit just like you lost it. It’s simple, and if you’re disciplined, it’s quick and almost painless. ”

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Using Credit Cards After Bankruptcy

So you have filed all of your papers with a bankruptcy lawyer and learned that the bankruptcy will stay on your credit record for at least the next ten years and you are feeling a little depressed. Everything in your financial life has been affected including your chances in the near future of getting a mortgage or car with a low interest rate. What do you do now? As odd as it sounds to some people many banks and companies out there want to do business with you, which in turn can help you start your financial life over. Increasing your credit score is not always easy, it is going to take some planning, will power, and even a little hard work. The good news is that it can be done.

Credit cards may be what put you into bankruptcy in the first place, but now it is your chance to use them to help you rebuild your credit history. I have a close friend who in 2006 declared bankruptcy, but she has worked hard to build up her credit and now has a very good standing with all three of the credit bureaus. Amazingly enough her credit score last time I talked to her is averaging around 730 for Transunion, Equifax, and Experian, which she thought would never be possible this soon after filing. It is true that she will have the bankruptcy on her permanent record for many more years, but at least she has a chance to get a home, car, or other asset at a decent price sometime in the future.

Throughout this rebuilding process you will want to closely monitor the changes in your credit reports. Many times mistakes are recorded in your credit report, some experts cite studies that say as much as 48% of all credit reports have errors in them that hurt the credit worthiness of the borrower. One of the nice things about some of the laws that have been passed recently is that a free report is available from each of the three credit bureaus on a yearly basis. So make sure you use these free reports to monitor and keep tabs on how your rebuilding process is progressing.

Some Tools You Can Use to Boost Your Credit Score

1) Secured Credit Cards: The amazing thing about these little plastic rectangular items is that they are one of the easiest ways to obtain credit after a bankruptcy. With a secured credit card you basically put a certain amount of money you have towards the card balance, and that is the credit line you will receive. So if you deposit $200 with the bank or financial company on that card then you will have a $200.00 credit line, just like some credit cards you have used in the past. If you make your payments on time and spend responsibly eventually the end result will be a positive impact on your credit score. My friend looked at her credit report six months after getting one of these cards and her score had actually increased by 20 points. What is also nice about the secured credit card is that if you make your payments on time they might eventually switch you over to an unsecured credit card and increase your credit line.

2) Big Box Store Cards: From researching these I have discovered that Harlem Furniture, Lowe’s, Menards, etc. might be willing to give you one of their cards even after you have declared bankruptcy, but their cards will definitely have a high interest rate for you. If you buy an item from one of these big box stores you have chosen for their credit card just make sure you pay responsibly and on time. Keep in mind that the final goal here is to show to the credit bureaus and future companies that you can make payments on time and can be trusted with more and better cards.

3) Piggy Back on Someone’s Good Credit: What on earth do I mean by that? I will go back to my friend who is married to someone with amazing credit. Because her husband had a great credit score she was able to “piggy back” on his good credit. Which means she was able to become an authorized user on a couple of his cards. She doesn’t even need to make purchases using those cards, but the credit bureaus will report that she is in good standing. You don’t even have to use your significant other’s credit to help yours, it could be a good friend that trusts you and won’t mind adding you as an authorized user. At the end of the day there are many tools at your disposable to help you with your newly cleaned credit slate.

Make sure you check on your credit reports periodically and dispute any mistakes that are not supposed to be on there. Establishing your new credit score is in your hands and you are ultimately responsible for proving to the credit bureaus and any creditors that you have changed your ways. With some discipline and hard work you can come out on top again financially, many people have gone down this path before you, and you will soon be ready to join the ranks of credit worthy consumers where you belong.

To get more information on how to get credit cards with bad credit go to

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