If you have no credit or less than perfect credit, your investment advisor will probably warn you
that getting a traditional credit card, or any type of credit for that matter,
will likely be difficult. Notice, however, that we said a “traditional,”
meaning an unsecured credit card.
Unsecured credit cards are granted based on your good name
and your promise to pay back, with interest, any money owed. As you can
imagine, lenders aren’t likely to hand those cards out to borrowers who haven’t
proven themselves or who have proven themselves unreliable in the past.
Secured credit cards, however, are a different story. These
cards are backed by some kind of collateral, such as the money in your checking
account or a deposit you paid to the credit card company. When you’re just
starting out or trying to rebuild, they are the way to go.
If you can manage a secured credit card and pay your bills
on time, opportunities for unsecured credit cards and other forms of credit are
sure to open up. Remember, you have to start somewhere, so never just
automatically rule out those secured credit cards.
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