Credit cards are more than just a mode of payment. The credit card method of payment is known and used everywhere.
When buying groceries, gadgets or clothing; booking a flight; making a hotel reservation; refueling a car or purchasing software online; people often use credit cards to accomplish tasks.
Do you have a credit card? For people with a history of bad credit, can they get a credit card too?
Can you really use a card to rebuild your credit history?
Not Everyone Has Good Credit
Credit card companies are aware of this fact and they have opened their doors to the bad credit market. Yes, many people who suffer from bad credit history apply for a secured credit card, not only to use with their purchases but to rebuild their credit as well.
If you can’t qualify for a regular card, a secured credit card may just be the thing you need.
What are secured credit cards?
These special cards look past the applicant’s credit history. As long as you can submit a security deposit in your account, you can qualify for a secured credit card. The security deposit is required to make up for the applicant’s poor credit. This way, if the cardholder fails to pay off his balances, the credit card issuer can tap in the security deposit for payment.
This set-up benefits both the credit card issuer and the cardholder. A secured credit card holder has the chance to improve his/her credit standing through regular use of the card and prompt payments.
Can you switch to an unsecured credit card after getting approved for a secured card? The answer is yes. There are credit card issuers that offer an upgrade for customers who have lived up to their obligations. However, not all companies provide this instant provision. After a year of prompt payments, don’t forget to ask your credit card company to upgrade your account especially if you have proven to be a good customer.
Be sure to choose a secured credit card issuer that will report your payments to the three major credit bureaus. Remember to use your card to your advantage and as a tool towards improving your credit history.