Best Credit Cards to Build Credit 2012

If your credit score is less than ideal, you’re not alone. Many people are struggling with low credit scores and finding it difficult – if not impossible – to borrow money, change jobs, and even get affordable car insurance. All hope is not lost, there are a number of steps you can take to build your credit. One of the easiest ways is to find credit cards to build credit.

Resolve Financial Crisis

[ad#Left-Align Content Ad]Before credit cards can help you build credit, you need to resolve any lingering financial crisis that put you in this position to start with. If you aren’t making enough money to pay all of your bills each month, you need to increase your income or find a way to decrease your expenses. Once you’ve figured out how to do that, and you’re consistently making enough money to pay your expenses and bills, you can focus on using credit cards to build credit.

You can’t increase your credit score without using credit, and in fact – if you go too long without any kind of credit reporting to the credit bureaus, eventually you won’t have a credit score at all! One of the best methods for improving your credit history is to show you can be responsible with a credit card. Here’s how to get started:

Secured Credit Cards to Build Credit

[ad#Left-Align Content Ad]If you have never had a credit card or you have a very low credit score, you probably won’t qualify for a regular credit card. A secured credit card is available to everyone and can be useful to establish or re-establish your credit. With a secured credit card, you have to give a deposit as collateral to use the card. Most cards require at least $500 as a deposit. The amount of your deposit becomes your initial credit line. If you make your payments on time for several months, many banks will reward you with a higher credit line and without the need to make an additional deposit. When choosing a secured credit card, make sure it reports your payments to the credit bureaus so it will help you build credit.

High Interest Credit Cards to Build Credit

For individuals who have just started down the path to bad credit scores, you may be eligible for a traditional credit card with a high interest rate. Interest rates are determined based on an individual’s risk for default – the lower your credit score, the higher your interest rate will be. If you are looking to use credit cards to build credit, a high interest card isn’t all that bad – if you use it responsibly. All credit cards provide you with a grace period to pay back your purchases. For example, if your credit card has a 28 day grace period, you can pay for any purchase made with your credit card within that time frame and you won’t be charged interest. Get in the habit of making credit card payments immediately after you use it to pay for a purchase and you’ll never pay interest and build credit at the same time.

High Annual Fee Credit Cards to Build Credit

Generally, people should avoid credit cards that charge high annual fees just for the priviledge of having one. If you have a lower credit score though and are looking to use credit cards to build credit, a card with an annual fee may not be a terrible option. Pay the annual fee as soon as you open the card account, and then use the card for small purchases that you pay off before the due date for several months and you’ll begin to see your credit score improve.