- Secured credit cards are available to anyone willing to put up a deposit equaling the credit line in advance. These cards are usually marketed to those who have poor credit. However, be advised that these cards often carry stiff fees when compared to unsecured cards.
As of April 2011, the best secured credit card deal was offered from Orchard Bank. This MasterCard requires a minimum deposit of $200, but there is no annual fee for the first year, no monthly fee, and no "one-time" fees, common in secured cards. The interest rate on purchases is a low 7.9 percent.
Note that this card adds an annual fee of $35 beginning in the second year. At this point, if you've maintained your credit responsibly, you may be able to qualify for an unsecured card with no annual fee. - Unsecured credit cards require no deposit but are more difficult to obtain. Thankfully, there are several options, particularly for students. However, many student cards only require that the cardholder be older than age 18, perfect if you're establishing credit but aren't in college.
Citi offers many such cards at competitive rates and a zero percent promotional term ranging from six to nine months. Interest rates begin at 12.24 percent and come with a 20-day grace period. Rebates and rewards are offered to those who can prove good grades or are responsible with their credit usage. - Consumers who are new to the credit card market will want to seek out offers that include no annual fee, low interest, and rewards such as cash back or "points" that can be applied toward airline tickets or other purchases. Customer service should be available 24 hours a day, seven days a week. Cardholders should be able to access their account information online at any time and should be able to make online payments without a fee.
- Always pay your bill on time, and pay in full if possible. Restrict your credit usage to no more than 50 percent of your credit limit. Avoid opening up multiple accounts at one time; this can cause your credit score to drop.
When you're ready, apply for an auto loan. Credit bureaus rank loans in order of quality: home loans are the best, auto loans are next, and credit cards are at the bottom. Having an auto loan along with a credit card and paying them responsibly will help you build excellent credit for when you really need it: when it's time to purchase your first home.