If you have a problem with bad credit, the good news is that you can repair it and enjoy a good credit standing again. One way to do so more easily is to apply for a secured credit card. This type of credit card is especially designed for people who can’t get a regular credit card because of poor credit. The question is, how can you use your secured credit card for credit repair? Check out the following advice:
Find a secured credit card with a good rate. Secured credit cards also have varying interest rates so you want to make sure that you choose one with a reasonable APR. Since it would be used to repair bad credit, you don’t want to get stuck with a card that has an expensive APR.
Make sure that your payments will be reported. To rebuild bad credit, your payments need to be reported to the three major credit bureaus. You need to be aware that not all issuers of secured credit cards provide credit reporting so it’s up to you to check it out.
[Article: Secured Credit Cards: Repairing Bad Credit]
Watch out the extra fees. Secured credit cards usually come with finance charges such as annual fees, transaction fees, late fees, etc. Aside from a good APR, see to it that the rest of fees are reasonable as well. Avoid paying extra charges by understanding the policies of your issuer and abiding by the rules.
Use your secured credit card regularly. To be able to rebuild bad credit at the soonest time, you need to use your credit card on a regular basis. Keep in mind that you need your payments to be report to the bureaus. If your credit card only stays in your wallet, then it would take you a longer time to repair.
Charge only what you can afford to pay back. Timely payment is crucial in improving bad credit history. Be conscious about your due dates of payment. As much as possible, submit your payments earlier than your deadline.
Upgrade to a non-secured account. Many secured credit card issuers will automatically upgrade your account to an unsecured one after a year of consistent payment. However, if your issuer doesn’t offer such a provision, do not hesitate to request for it, especially when you know that you deserve it. Needless to say, switching to an unsecured account gives you the opportunity to enjoy lower interest rate, higher credit limit and more privileges.
Do not apply for unsecured credit cards all the same time. When you successfully make the switch to an unsecured account, do not try to apply for multiple credit cards right away, as this can send a negative impression to creditors. If you want to get a second unsecured credit card, send your application after six months but be sure to manage your current account with caution.