Finding A Credit Card For Individuals With No Credit History

April 10, 2012 by  Filed under: Credit 

Whether you are a young adult or just someone who has not paid much attention to building credit over the years, you may find yourself in an awkward situation when trying to make a large purchase such as a vehicle or home using credit. Credit history is used to determine eligibility for loans to secure these types of purchases which give lenders an idea of how likely you are to repay the loan and not default on it. One way that many people are helping establish a credit history is through the use of charge cards.

Obtaining a charge card to help build your credit is often much easier than securing larger loans for homes and vehicles. The reason for this is cards offer smaller lines of credit so the eligibility requirements are a bit more flexible than those for larger lines. Having no credit history does not automatically disqualify you for charge card where it could possibly disqualify you from securing a larger loan. There are a variety of different types of cards that you can apply for to help you get started building a credit history.

How a credit card helps you build a history is simple. You make purchases using the card and you are then billed monthly for the amount you spent. In many cases you can pay that amount all at once or in monthly installments. When you make monthly installments promptly and on time, your credit worthiness builds up as time progresses. This is what lenders look at when evaluating credit histories. There are two types of cards that are typically issued to people who have no credit history. The two types are secured and unsecured credit cards.

Secured credit cards as the name implies require a security deposit to be made in exchange for a card. The security deposit amount will vary depending on the credit company. With a secured card, you will be given a credit line equal to or slightly higher than the amount of the security deposit that you gave. The other type, an unsecured card, gives you a line of credit without having to make a security deposit. Unsecured cards will give you a credit limit that is reasonable but is rarely high enough to allow you to get deep into debt.

Finding the right credit card that fits your needs requires a little bit of research. There are a number of companies out there who offer a variety of different cards with varying interest rates. Additionally, some even offer different rewards or perks as part of being a customer with them. Compare companies and find the card that will best suit your needs. Also, do not rely too heavily on your charge cards. Using them to supplement income can be dangerous and lead you down a road to excessive debt that may hurt you in the long run.

Visit http://www.creditcardrates.com to find the best credit cards for you and some of the lowest credit card rates around.

Article Source:
http://EzineArticles.com/?expert=Greg_M_Beaumont

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