It seems that credit is the main way to purchase these days.
Cash isn’t even a close second anymore.
But if you’re just starting out and have no credit, it can be difficult to obtain a credit card.
This is because when you have no payment history, it is difficult to judge if you will pay back the loan or not.
Still, it does leave many of us in quite a pickle, since you need credit to get credit.
Where do you go from here?
Do Your Research
Some companies will actually look at the whole picture and not just your credit history.
Ask for a company’s loan policy.
Look for ones that check for your housing situation, bills, and income.
It is also a plus if you have been with your current employer and residence for at least a year.
This shows your potential creditors that you are stable and won’t move at the drop of a hat.
If you have a savings account, many banks will issue a line of credit against the amount in the account.
They also will probably lock the account against withdrawal until you begin to pay back the loan.
They have their money, either way, so you are a pretty safe bet for credit.
This is similar to secured credit loans. The big difference is you don’t get the money.
Instead, you are using the money to open up a locked savings account. As you pay on the loan, the money then becomes available in the account.
This is a great way to build credit and savings at the same time since you did not have to have the money already in the account to get the loan.
Some banks like the one I use no longer offer passbook loans.
They offer a loan against something of equal value such as a vehicle or laptop.
Do your homework first as some banks have a minimum amount on this type of loan and the item must be worth at least the amount.
Credit unions are a little bit more relaxed in their approval process.
If you qualify for membership, it may be easier to get a credit card from one of these companies.
Many of them will even offer to mail you a free credit report if you are turned down.
Many banks are less liberal in their approval process for college students. If you are currently a student, this may be the route for you.
Nearly every department store, grocery store, and gas station around is now offering a store card.
These are much easier to obtain because they can only be used at that company.
The important thing, though, is that they are reported to the credit bureaus so they can still help your credit history.
No matter which method you use, once you get a credit card, be careful with it. Always think before you spend and make sure you can pay back the loan.
Credit cards can help you establish good credit and build a bright future, but if used unwisely, they can also cause many headaches that will take forever to go away. Guard your credit with your life!…