No Credit History? Look Into a Secured Credit Card

A credit card is essential for many financial transactions like booking a flight, making a hotel reservation, or renting a car. But if you have a bad credit history or have never had credit, it may be impossible to get a regular credit card. Without one, some dealings may be difficult, even if you have the cash. If you find yourself in this situation, you have only one real option: get a secured credit card.


Many financial institutions offer cards of this type. Money you deposit into your account following the approval of your application and prior to the issuance of the card acts as collateral against your credit. You can then proceed to use your secured card just like a regular credit card. Some issuers offer different terms, depending on the amount of the security deposit you make. Issuers also report regularly to all three credit bureaus, typically monthly or every few months.

With responsible use of your new secured card, you can increase your credit score and start building or rebuilding your credit history. You can access your credit report from the credit bureaus online, and it’s a very good idea to do this twice a year, since mistakes on credit records are very common. There are even some apps available that you can access at any time from your phone, making it easy to check on your credit health.

When applying for a secured card, be sure to read the fine print so that you understand the interest rates and other charges. Some unscrupulous institutions take advantage of applicants who don’t do this by gouging them with hidden fees. Others will offer low fees, but have very high interest rates. It is always advisable to consider several issuers so that you are sure to select the one with the best offer.

One of the benefits of a secured credit card is that it can be used exactly like a regular credit card. Just having a secured card makes many types of purchases and reservations possible and/or easier. Make sure to use the card, and to use it wisely, by always paying off the balance and never using more than 30% of your available credit. Now that you’ve learned how to rebuild credit, you’re on the fast track to an excellent credit score.

OneUnited Bank

Our community’s dream is now a reality! OneUnited Bank is fulfilling the hundred year old civil rights dream by garnering the savings power of our communities and channeling it back into urban communities for economic development. With your support by simply opening an FDIC insured account with great rates, we will continue to accomplish this dream everyday!

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