Credit Card Originations Down: Americans Find Ways To Secure Cards

By Jeffrey Paulsen on April 18, 2010, 8:44 am Posted in Finance News

With the economy down and credit stipulations up, some people are finding it hard to establish good credit. Whether you are overcoming the obstacle of a bad history with credit or are trying to start to establish credit, there are some easy and efficient ways to establish credit even during the credit crunch.

Consumer Secured Cards

Secured credit cards offer consumers the ability to open a credit account with their own money; generally the amount to open one of these accounts is between $200 and $300. Within a certain period of time these cards begin to report to the three major credit bureaus. Some companies allow consumers who have managed their account well to upgrade to an unsecured credit card; this happens at around 18 months after opening the initial account. At that point, they generally refund the initial deposit.

Company Credit Cards

Another source for easier credit is credit cards offered by retail stores and gas companies. While these sometimes offer big discounts and incentives for card users, there are some downsides to these cards as well. Mainly, these cards have a very high interest rate and low credit lines. In addition, some generally require that the consumer pay the balance off each month; however, these report to the credit bureaus just like unsecured credit cards do.

Pre-Paid Credit Cards

Finally, some pre-paid cards offer the ability to report to credit bureaus for a fee. These work just like gift cards in that the consumer loads money onto the card. The main problem with these cards is the fact that they generally do not report to the major credit reporting bureaus but rather, they report to alternative credit reporting bureaus. Also, some of these cards are loaded with hidden fees.

 

No matter how you choose to rebuild or establish your credit, you must always do your homework as some sources can hurt you more than they can help.

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