NationalCreditReport.com on How Different Types of Credit Cards Can Help Consumers Build and Establish Their Credit Scores

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Building a Credit Score: There Are Many Credit Card Options With Different Benefits To Choose From

A common hurdle that consumers have to clear when establishing or building their credit score is knowing what kind of credit card will be the best for them and their own specific financial goals. NationalCreditReport.com, a leader in credit report, credit score and credit monitoring services, advises consumers to do their research to determine which kind of card fits their needs before they apply for new credit. Whether it is a traditional credit card, a prepaid credit card to build credit payment history or a secured credit card that reports to all three bureaus, they can all help in different ways.

“There are a variety of great options on the market today, each with unique attributes that can help folks with no credit or bad credit build their credit score with the three major credit bureaus (Experian™, Equifax™, and TransUnion™), as well as provide the convenience of using plastic,” said Samuel S. Ambrose, Vice President of Marketing and Operations of NationalCreditReport.com. “Consumers should educate themselves before committing to a particular card as the different types of cards have varied requirements and can help them in very different ways. For instance, even the best secured credit card will not help an individual who makes late payments build their credit score.”

Types of Credit Cards and How They Affect Credit Scores :

  •      Traditional Credit Card - The most commonly used card. The consumer is extended a line of credit by a financial institution and they are expected to make at least minimum payments on an agreed-upon schedule. Some traditional credit cards have annual fees and most have finance charges if a balance is carried and late fees if minimum payments are not made on time. The percentage of the credit used and late payments are reported usually to all three major credit bureaus, thus affecting one’s credit score.
  •      Secured Credit Card - This card requires the consumer to secure it with a deposit, which is money or collateral, so that the card issuer is guaranteed payment. Secured credit cards are easier to get than traditional cards even if you have bad credit or no credit. The best secured credit cards are reported to the three major credit bureaus so that on-time payments will help establish their credit file.
  •      Prepaid Credit Cards - These are comparable to debit cards, except that they are not linked to a bank account. The consumer makes a deposit which is the card’s credit limit. While typically prepaid credit cards don’t build credit scores, they provide the convenience of using plastic and allow consumers the safety of not being charged overdraft fees. Some prepaid credit card providers do report payment history to a different credit bureau that tracks specifically payment trends by the individual consumer.
  •      Retail Store Credit Cards - These cards usually have a lower limit and are easier to obtain. It is advised that consumers make a few purchases on these cards and pay them in full each month to help establish their credit file.

NationalCreditReport.com advises individuals with bad or no credit that have been denied a traditional credit card, to try to obtain a secured credit card that reports to all three bureaus so that the credit file they build can help them get a traditional card in the future.

“Whether the consumer is trying to find the best secured credit cards or choose between a debit and prepaid credit card what matters most is that they are aware that cards can both help and hurt them if they’re not responsible,” said Ambrose.

About NationalCreditReport.com
Since 2004, NationalCreditReport.com has specialized in providing credit information and credit monitoring services to consumers to help them understand their credit report and score. NationalCreditReport.com encourages consumers to check their credit report from the 3 major credit bureaus on a regular basis.

Contact:
Allison Tomek
NationalCreditReport.com
561-805-8000

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