Get tips on the best ways to build credit—even if you’re a young adult.
How to Use a Subprime Credit Card to Build Credit
Another type of card that’s available if you have a short credit history is a subprime credit card. They’re real credit cards with sky-high interest rates (some as high as 30%!) and usually come with low credit limits and extra fees. So, use subprime cards with extreme caution. Remember that the only reason to use one is to build up a strong payment history, not to rack up huge interest charges. Find subprime offers on sites like Bankrate.com and Creditcardguide.com.
My quick and dirty tip for using these alternate types of credit cards is to make small purchases that you’re absolutely sure you can pay off in full each month. That way you never get hit with outrageous interest charges and you prove that you know how to handle credit. Your credit baby steps will start to pay off. You’ll establish credit, your credit score will increase, and you’ll qualify for loans or credit cards with reasonable terms. You’ll find links to all the websites I mentioned at the bottom of this page.
For more information about credit scores please check out my Quick Tip about which factors affect your credit score the most.
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