Question: Hi! I charged up a few credit cards when I was in college and used credit counseling to pay them off. This has been paid off for five years, but I haven’t had any credit cards or much other credit activity since. Now, I’d like to rebuild my credit, but I recently applied for a credit card through my bank and was declined. Any suggestions for getting back in the good graces of the powers that be in the credit world? Chandra, Seattle, WA
Answer: It wasn’t all that long ago that all you had to do was breath and you could get a credit card. And I’m not convinced that even breathing mattered toward the end of the credit boom. Now that the boom has gone bust it is harder to get your first card.
It’s time to revive three classic techniques to get a credit card. One time technique is to apply at a major retail store where you shop. Another is to get a gasoline credit card. The last is a secured credit card. Another option is a “secured” credit card. With secured card, you open up a savings account with a bank. It issues you a card that looks like any other credit card but your credit is equal to or somewhat less than the amount you’ve put on deposit.
The credit with all three of these options tends to be expensive. The idea is that after showing a pattern of paying off your bills on time you switch to a traditional “unsecured” credit card with a lower interest rate and no fees.
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