I was Denied for a Credit Card!
What Should I do?

Many people get denied credit every day. There are always options if you have been denied for a standard credit card. There are different types of credit cards available, so find one that works with your situation.

One type of credit card is a standard credit card. This card is an unsecured line of credit, with varying APRs (annual percentage rates) and limits. These types of cards may have reward benefits, such as cash back or airline miles, and are issued through traditional credit card lenders or banks. These cards report activity to the credit bureaus and when used responsibly will help increase your credit score. However, these types of cards are harder to get when you have bad credit.

The next type of card is a secured credit card. These cards require collateral that equals the credit limit. For example, if you get a secured credit card for $500.00, you must put down a $500.00 deposit. This card works like a standard credit card, with a bill being mailed to you every month. Most of them report to the credit bureaus. Having and using this kind of credit card is a great way to rebuild credit.

The next kind of credit card is prepaid. The use of this card differs from a secured credit card because the limit amount must be paid, then it is used and must be paid again. This card is closer to a reloadable gift card since you will not get a bill and you must have money in the account in order to use the card. Read the fine print of these cards, because they may or may not report to the credit bureaus. If a card does not report to the credit bureau it will not help improve your credit.

Another type of card is a charge card. This card is more misunderstood than the rest. With a charge card you may or may not have a limit depending on the card, but you must pay back what you have charged every month. If you spend $1,000.00 in a month on a charge card, at the end of your billing cycle you must pay $1,000.00 back. Charge cards usually report to the credit bureaus, but in order to better your credit you must charge and pay back a high amount one month. When reported, this will look like you have a high limit but no balance, thereby increasing your available credit. It is much easier to repair your credit by using one of the other types of cards available.

When applying for a card, decide which one is best for you and your credit situation, and remember to use that card responsibly.