Finding the Best Credit Cards to Rebuild Credit

If you’re looking for the best credit cards to rebuild credit, you don’t necessarily have to settle for cards that charge unreasonable fees, exorbitant interest rates or restrict your use in order to gradually rebuild your credit with responsible use.

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In fact, because the credit accounts you own the longest (and keep active and in good standing) can contribute positively to your credit score, it may be important to find a credit card that has terms, features and benefits that will support your financial life for the long haul.

Here are some key features to consider prioritizing when you’re shopping for a credit card to rebuild credit.

1. Consider Credit Utilization

In order to maintain healthy credit utilization ratios, (an important factor in your credit score calculation), you might want to consider credit utilization as you look for a card. CreditCards.com suggests that paying your credit card bill twice a month can help ensure you manage credit utilization, even if your credit line is low. As you rebuild credit, you may want to consider not only if you’re able to pay off your balance each month, but how much of your available balance you are using.

The benefit of a secured credit card is that some card issuers may offer the flexibility to choose the amount of the credit line associated with the card, based in part on the amount of money deposited to secure the line. If when making the deposit, you consider how much of a credit line you can utilize responsibly each month, this can help you rebuild your credit.

2. The Opportunity to Build or Rebuild Credit With Responsible Use

Confirm that any card you consider reports your monthly credit activity to the three major credit bureaus. If you open a secured credit card, consider when your account will be evaluated to “graduate” into an unsecured credit card. Discover it® Secured credit cardholders may receive automatic monthly reviews of their account after 8 months of responsible credit card use. Based on how responsibly you use your card, you may qualify to transition to an unsecured credit card. If you do not qualify, your account will continue getting reviewed monthly until you meet the criteria to transition. Using your credit card responsibly and mindfully will play a large role in how quickly you build your credit once you receive a secured credit card. Avoiding delinquencies, paying your balance on time and staying within your credit limit can help you rebuild your credit and eventually transition to an unsecured card.

3. Potential to Earn Rewards

Look for credit card issuers who offer rewards or cash back for your purchases, or interest on a deposit you make to open a secured credit card. Discover it® Secured cardholders, for example, receive cash back on all purchases and a dollar-for-dollar match on all cash back earned after one year in the first one or two billing periods of the following year.1 For more specific information on secured card rewards, please review Discover’s Cashback program details.

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4. Wide Acceptance at a Variety of Merchants

Store credit cards may have less stringent approval criteria than major credit cards, but if you’re looking to build or rebuild your credit, your card should help you build credit while purchasing items you truly need — not tempt you into buying items that aren’t in your budget.

Finding the credit card to rebuild credit can also help provide more support for your financial life down the line. Finding a card with a manageable credit line, the opportunity to build credit with responsible use and a beneficial rewards program can allow you to gradually raise your credit score and get on the right path to financial well-being.

Source:

1. Cashback Match: Only from Discover, as of July 2017. No purchase minimums. After the first 12 consecutive billing periods that your new account is open, we will match all of the cash back rewards you’ve earned and apply them to your account in the following one or two billing periods. If your account is closed or no longer in the cash back reward program at the time we calculate your potential award, your cash back will not be matched. You’ve earned cash back rewards when they have posted to your account by the end of the 12th consecutive billing period. This promotional offer may not be offered in the future. This exclusive offer is available only to new cardmembers.

Legal Disclaimer: This site is for educational purposes and is not a substitute for professional advice. The material on this site is not intended to provide legal, investment, or financial advice and does not indicate the availability of any Discover product or service. It does not guarantee that Discover offers or endorses a product or service. For specific advice about your unique circumstances, you may wish to consult a qualified professional.

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