Credit Cards(115011)

Let's face it - building credit can be an extremely hard task. The most challenging aspect of building credit with a credit card is that, in most cases, the only way to get one is to have a decent credit score. This can be a vicious cycle trying to get credit for a credit card and trying to get a credit card to build your credit score. There are some loop holes, however. Finding those loopholes is the key to building your score. If you want to know how to build credit with a card then follow these guidelines.

The first step to take in this endeavor is to get a secured card. Since obtaining a traditional credit card can sometimes be too difficult, this may be your only option, at least for now.  A secured card is issued to a consumer after the consumer deposits a specific amount of money and that amount of money, minus fees, is credited to the credit card holder’s account. This may seem like a rip off (and go against the purpose of owning a credit card) but the truth is, when you have little or no credit history, a company will not be willing to give away credit unless you secure your account. This protects the credit card company.

The next step on how to build credit with a credit card is to eventually apply and hopefully get approved for a higher interest unsecured card. This card will usually have a high interest rate, but is still a great step toward building your credit. After using this card for a year or so, you may be able to move up to a card with a lower interest rate.

The important thing to remember is to always make your payments on time. You should also pay slightly more than the balance due. A great history of payments will be recorded on your credit report. After "moving up" to a better credit card, continue this practice, while being sure to pay all other bills on time and you will eventually gain a score you can only dream of.  It's a slow and steady process - don't try to rush it.  While you do this, be sure to maintain a sound budget, so that you aren't spending beyond your means.

A word of caution: Make sure to stick with just one card at first, as more then one can quickly overwhelm you with lots fees and interest that you may occur, and your debt can build up. This is a quick and surefire way to destroy your credit, as it can spiral out of control very quickly. The important thing to remember is to be patent, don't overspend, and always pay your bill on time (and early) whenever possible. This is a how to build credit with a credit card.