Using a secured credit card

Consumers with bad credit know that they need to be using credit in order to improve their score. But once a borrower has a poor credit report, it can be difficult to get a loan or credit card.

One fact that buyers should be aware of is that they are often pre-approved for a car loan. Paying this off over time will raise a buyer’s credit. Another way to accomplish this is to apply for a secured credit card.

According to, the CARD Act has introduced some new regulations as to how credit cards work. Previously, buyers would need to apply for a credit card with a small credit ceiling and a large amount of fees – fees that would count toward the total amount of credit offered. In essence, buyers would be paying lots of money for access to a small amount of credit.

While the CARD Act has reduced these fees, many consumers are turning toward secured credit cards. These cards have low fees and charges because they are “secured” through the borrower’s own money. The credit limit is determined by how much money the consumer deposits. If they default, the money is kept. Otherwise, they can charge up to that limit. Yet for those looking to build their credit again, this is a great alternative to a card that will charge numerous fees before a buyer can even use it.

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