Of all the tools and avenues that are out there to build and maintain a positive credit rating, the simple credit card has to possibly be one of the best to use. At the same time though, for someone who is determined to damage their credit rating there is no easier way to do this faster then with credit cards.
The Secured Credit Card
Although obtaining a credit card today is a little more difficult then it has been in the past they still are available. In fact, even if you now have poor credit you can still get what is known as a secured credit card.
Using Your Own Money
A secured credit card is simply a credit card that requires that you place a certain amount of money in deposit. This then will be the money that you draw off of and use with the credit card. It may seem like a screwy way of doing things but it is a god way to build credit.
Same Rules for Secured Credit Cards
With a this type of secured credit card, the credit card company assumes no risk, so needless to say they are much easier to get. However; the same rules apply, meaning that even though it is your own money that you are drawing off of there are late fees and rather high interest rates.
Credit Card Contracts – Financial Minefields
Credit card contracts are notoriously complex. They are also long and written in fine print, so reading them is incredibly difficult. Basically though they outline a financial minefield for you to negotiate your way through.
Pay Close Attention
Make even one late payment on ANY bill that you have, no matter how unrelated it is to your credit card and your interest rate shoots up automatically. Also some credit cards have it in their contracts that they can raise their interest rate at any time for no reason at all. So use your credit cards wisely and manage them carefully, because while you can build credit with them, they can at the same time reach out and bit you.
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