First time borrowers want to apply for a credit card to build their history. That’s a valid argument if you are willing to pay all of the debts instantly, without excuses. To be able to do this, you have to first decide on which card is appropriate for you. Though for first time borrowers, they don’t have much choice, since they are only given a choice of a secured credit card or a gas card. If you are one of them, you don’t have to worry because credit card companies are opening their doors for you.
Secured credit cards offers appeal to the first time borrowers because these cards accept people who does not have a credit history. This type of card is easy to obtain because credit companies offering them don’t check the credit backgrounds of their consumers. The only thing required out of this card is a security deposit which you will have to put in before getting approved. A security deposit is an amount you deposit in an account which will be reserved and applied only when you defaulted in a payment. Well, this becomes a problem for first timers for the coming up with an amount. But typically, you get a higher credit limit than what you actually deposit.
This type of cards also usually charges higher interests primarily because you are flagged as a risky consumer, no matter how willing you are to pay. But if you really want to build a credit history using this card, you must go along with the high interest charges and the annual fees. If you nailed every payment of fees and charges, the credit card company will think you as someone that needs to be transferred to a low risk consumer from the high risk. In this, you can be qualified to apply for an unsecured credit card and you can close your secured credit card account and take your deposit back.
So if you are seriously into building a good credit history, start off with a secured credit card. But before getting your hands on any application forms, you need to know how to shop around. This means, getting a list of credit card companies and comparing the possible benefits each can offer. The charges are also used as a basis of comparison and the higher the charges, the lesser it gets attractive. Match your expected expenses to the cards’ benefits and costs, if you come up with a figure that targets your expected returns, then you better apply for that now.
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