The Best Credit Cards

What Is a Secured Credit Card? A secured credit card is a type of credit card for people with limited or damaged credit that requires the user to place a refundable security deposit, which the card’s issuer holds as collateral until the account is closed. This deposit makes it less risky for banks and credit unions to issue credit cards to inexperienced applicants and people with a history of payment problems. If something goes wrong, the issuer can just keep the money. As a result, secured credit cards offer the highest approval odds of any type of credit card. And they don’t need to charge the same high fees as unsecured credit cards for bad credit. A secured credit card can help you build or rebuild your credit, just like a “normal credit card.” In fact, secured credit cards are indistinguishable from unsecured cards on credit reports. All major secured cards report account information to the major credit bureaus on a monthly basis. And if that information reflects on-time payments, your credit standing should improve, assuming you manage the rest of your finances responsibly. The one thing a secured credit card generally won’t give you is the ability to actually borrow money. Most secured credit cards are fully secured, which means your spending limit will equal your deposit amount. It is very rare to find a partially secured credit card, which gives you a line of credit in excess of the amount that you put down. So a secured card is not where you should turn for emergency financing. But you should definitely get a secured credit card if lost-cost credit improvement is your top priority. How Secured Credit Cards Work: You place a refundable security deposit using a bank transfer. A debit card or check could be an option, too, depending on the card. Some secured cards require you to place a deposit when you apply, others after you’re approved. The minimum deposit for most secured cards is $200 or $300. The amount of your deposit becomes your spending limit. This prevents you from spending more than you can afford to repay, which benefits both you and the card issuer in the long run. For what it’s worth, you can usually add to your deposit over time for more spending power. The credit card company holds your deposit as collateral. The funds are usually kept in a custodial account that does not bear interest. Purchases and payments are the same as with any other credit card. You can spend up to your credit limit. You’ll have to pay your bill by the due date each month. And any balance you carry from month to month will accrue interest. You get the deposit back when you close your account. You’ll have to bring your account balance to zero first. But after you do (or the issuer subtracts what you owe), you’ll get a check or bank transfer returning your deposit money. After using a secured credit card responsibly for at least 12 months, you should be able to graduate to an unsecured credit card. Your secured card’s issuer might even offer to convert your account to unsecured by giving back your security deposit. If your card doesn’t charge an annual fee, you should definitely consider keeping it open. This would help make your credit history appear longer, benefitting your credit score. But you should still shop around to see if you qualify for a better card to use on an everyday basis.

Will this credit card help fix your bad credit? Imagine getting approved for a credit card, using it responsibly, paying the bill on time every single month — and then finding out that your account activity isn’t even being reported to the credit bureaus. In that situation, all your good behavior isn’t helping you improve your credit. So make sure that the issuer is reporting account activity to the credit bureaus. It’s best if they report to all three bureaus — TransUnion, Equifax and Experian — because then you’ll be building a credit file with each bureau. Since credit scores are derived from the data collected by these three bureaus, you want all your credit wins to show up in their files. Are the card’s fees reasonable? Some credit card issuers take advantage of people with bad credit by gouging them with excessive fees. Some fees are common on credit cards for bad credit: Annual fee: There are some cards available with no annual fee at all. For secured credit cards that do charge them, the average is around $30. If a card charge significantly more than this, that should be a red flag. Balance transfer fee: To transfer a balance from one credit card to another, you’ll typically pay 3% to 5% of the transferred amount. People with good credit can sometimes find balance transfer offers that don’t charge a fee, but for now, look for something that costs closer to 3% than 5%. Late fees: If you pay your bill late enough, your credit will take a hit. So the fee isn’t the only downside of missing the due date. But the maximum late fee allowed by the Consumer Financial Protection Bureau is $27 for a first offense and $38 after that. Why a card is good for bad credit If you’ve had trouble with credit in the past, it’s tempting to avoid using plastic entirely. But having a good credit score is worth striving for. Good credit makes it easier to borrow money, yes, but can also have an impact on other things, like your car insurance rates, your ability to rent an apartment, and even accessing essential services like utilities or cell phones. The fastest way to build credit is to use a credit card. So if you have bad credit, it’s worth looking for a credit card with reasonable fees and good terms that will allow you to improve your credit history over time.

Hey, even if you’re not looking for another credit card, discovering new credit card offers for a 0% intro APR can be incredibly exciting! A low-interest credit card saves you money by reducing the cost of debt: When you're paying less in interest, you can pay back what you've borrowed more quickly. A card with a 0% intro APR period will save you the most on interest in the short term. But is taking advantage of a 0% intro APR offer the right decision for you? Before you rush off to apply for a 0% intro APR card, make sure you understand how the offer works, as well as how you plan to use the card. 1.Types of 0% APR offers You may heard about APR for many times, but do you really understand what it is? A purchase APR, or annual percentage rate, is the interest rate applied to your purchases if you carry a balance on your credit card. 0% APR offer for purchases It means you won’t be charged interest on your purchases for a certain period of time as determined by your credit card company. In order to take advantage of this offer, you’ll need to make at least the minimum payments due on your statement. 0% APR offer for balance transfers It means you’re not charged interest on a balance you transfer from another credit card. This type of offer also comes with a temporary introductory period. 2.Is it really 0% APR? Even if a card offers a 0% intro APR, you may still have to pay interest on some things. For example, if your 0% intro APR offer was for balance transfers only, then any new purchases on your card may be charged interest unless you pay off your balance in full each month by the due date. After the introductory period ends, your balance and any new purchases will be subjected to the regular APR. 3.When is it a good idea to apply for a 0% APR offer credit card? The most common situation for people to apply for a low or zero APR credit card is using it to pay down high-interest credit card debt. High-interest balances can be difficult to pay down, but making a balance transfer with a 0% intro APR card could help ease the burden. Doing so can help you focus on paying off your debt as quickly as possible, ideally during the introductory period. The other case people may wanna apply for such type credit cards is when they are having large purchases. Using this credit card can help ease the burden of paying a large amount at once. It can also help you avoid taking out a personal loan, which you may have to pay interest on. Instead, you can parcel out your payments throughout the introductory period without having to pay any interest.

What to Look for in a Balance Transfer Card Balance transfers can save money. Say a cardholder has a $5,000 balance on a credit card with a 20% applied percentage rate (APR). Carrying that balance costs about $1,000 a year, at this rate. After securing a 0% balance transfer on a new credit card and moving the $5,000 balance, the cardholder gets a year to pay it off with no interest and just a fee to transfer the balance. But details and surprises of these transfers are numerous. For example, after the transfer, the cardholder still has to make the minimum monthly payment on the card before the due date to keep that 0% rate. And pay attention to the interest rate. Does the new card have a default rate that’s higher than the interest the balance incurs on the current card? Similarly, any default under any of the cardholder agreement—such as making payments late, exceeding the credit limit, or bouncing a check—can make the interest jump to a penalty rate as high as 29.99%. The 0% rate is usually valid for 12 or 18 months. Can the transferred balance be paid off during that period? If not, what interest rate kicks in afterward? (And don’t expect a reminder from the credit card company about when the promotional rate is ending.) With accounts that involve a new credit card, the terms will require the cardholder to complete the balance transfer within a certain time (usually one to two months) to receive any promotional rate. The day after that window closes, regular interest rates begin. Also, a credit card company will generally not allow an existing customer to transfer a balance to a new account. A past-due payment with the creditor who will receive the balance, or if the cardholder has filed for bankruptcy, may also result in the decline of the transfer. Transferring a balance if there's no 0% or low-rate interest rate offer can work, but do the math first. Say a cardholder has a $3,000 balance with a 30% interest rate, which translates into $900 a year in interest. Transferring the balance to a card with a 27% APR and a 3% transfer fee means paying $810 in interest a year, plus a $90 balance transfer fee. The cardholder would break even only after a year. In this example, to come out ahead the cardholder needs a deal where the APR is less than 27%. A better plan might be to ask the existing card issuer for an interest-rate reduction to 27% or less, saving the balance-transfer fee. Beware the Grace Period People who take advantage of these offers sometimes find themselves on the hook for unexpected interest charges. The problem is that transferring a balance means carrying a monthly balance. Carrying a monthly balance by not paying off the debt each month—even one with a 0% interest rate—can mean losing the card’s grace period and paying surprise interest on new purchases. The grace period is the time between the end of the credit card billing cycle and the due date of the bill. During that period (by law, at least 21 days) the cardholder doesn't have to pay interest on new purchases. But the grace period only applies if the cardholder is carrying no balance on the card. What many consumers don’t realize is that carrying a balance from a promotional balance transfer affects the grace period. Also bear in mind that many offers stipulate that the cardholder's credit score determines the actual number of months of 0% balance transfer in the introductory period. If the terms of the grace period for purchases after a transfer are unclear, options are to pass on the offer and look for one with clearer terms; take the 0% balance transfer offer, but don't use the card for any purchases until the balance transfer is paid off, or choose a credit card that offers a 0% introductory APR for the same number of months on both balance transfers and new purchases. The only way to get the grace period back on a card and stop paying interest is to pay off the entire balance transfer, as well as all new purchases. Transferring a credit card balance should be a tool to escape debt faster and spend less money on interest without hurting one's credit rating. Personal Loan Comparison Some financial advisors feel credit card balance transfers make sense only if a cardholder can pay off all or most of the debt during the promotional rate period. After that period ends, a cardholder is likely to face another high interest rate on their balance, in which case a personal loan—with rates that tend to be lower, or fixed, or both—is probably the cheaper option. If the personal loan has to be secured, however, the cardholder may not be comfortable pledging assets as collateral. Credit card debt is unsecured, and in the event of default, it's unlikely that the card issuer will sue and come after cardholder assets. With a secured personal loan, the lender can take assets to recoup losses.

For every college student, a student credit card is the best choice for them to build credit while giving cashback on daily purchases. The rewards, protections, and the credit-building power offered by student credit cards are specified designed for college students who have limited or no credit. When it comes to building credit, starting young is better—as long as you take baby steps and don’t treat your first credit card(s) as free money to be spent. It can take seven years to develop a credit score that’s considered “excellent”. 1. How are student credit cards different? Student credit cards are simply credit cards that are marketed to students. They work exactly the same, but student cards carry lower credit limits and offer students an increased likelihood of approval. 2.How to get approved for a student credit card? It’s much easier to get approved for a student credit card than other cards, but student credit cards still have minimum approval requirements. First of all, you need to be a student over the age of 18. Yeah, you have to be a student to apply for a student card. Secondly, you need to have some document-able income. In other words, you have to be employed, a part-time job is fine. Last but not least, you don’t have bad credit already. If you already made some credit mistakes, don’t expect a student card to approve you. 3. Can you upgrade a student credit card when you graduate? Yes. If you use your card responsibly and pay your card every month on time, banks will absolutely upgrade your account to a regular credit card. Even before you graduate, many banks will automatically give you a chance to increase your credit limit after three to 12 months of responsible use. If they don’t, you can easily call and ask.

Is a retail store credit card right for you? Here’s a basic rule that applies to all store credit cards: If you really like Store X, you might get value from the Store X Credit Card. But maybe not. Check out our card picks to learn more.