February 2nd, 2010
Dear Credit Karma – Credit Cards
Dear Credit Karma,
I have a credit score of 613 after filing bankruptcy a year ago. What is the best secured credit card to start with?
The Public Savings Bank Secured Visa Card is a great first step to rebuilding your credit and also guarantees approval because there is no credit score or income requirement. Like most secured cards, the Public Savings Card requires an upfront security deposit of a minimum $200 and up to $1,500, which also determines your credit limit. Secured cards reports to all 3 major credit bureaus just like unsecured credit cards, but should you ever default on a payment, the minimum will be deducted from your security deposit so you can continue to build a positive credit history.
What sets this card apart from other secured cards is that it has no annual fee and just requires a one-time activation fee of $79, while almost all unsecured cards have a recurring annual fee. Also, penalty for a late payment or for going over your credit limit is not as steep as other secured cards, and the 11.24% APR is a low interest rate relative to what is generally offered to poor credit borrowers.
Another big bonus of choosing this card is its introductory offer of 0% interest on purchases for the first 6 months, which is unique to the unsecured credit card market; just make sure you pay off all the purchases charged interest-free for the first six months, or else you’ll end up paying interest on your remaining balance once the offer period ends. With this card, you’ll be on your way to raising your credit score high enough to apply for an unsecured credit card with confidence..
Dear Credit Karma,
Should I get a Target Visa or Target Credit Card which one do think I should get and what do you think about them?
Which credit card you apply for depends primarily on where you will be using your credit card. The crucial difference between the two credit cards is that the Target Visa card is accepted everywhere Visa is accepted, while the Target Credit Card can only be used at Target stores and on Target.com, which means you only utilize rewards and benefits when you shop at Target. While both cards offer the same rewards program, the Visa card has additional online bill pay services and Visa benefits unique to the Visa program. The Target website states that in the application process, applicants will first be considered for the Target Visa, and if they do not qualify, will be considered for the Target Credit Card.
Also, keep in mind that both cards have the kind of steep APR that retail cards are notorious for: 25.24% APR for the Target Credit Card and 23.24% APR for the Target Visa. Ultimately, you should consider whether either card will really benefit you. Do the rewards outweigh the potential interest rate charges? If you shop at Target enough to earn the 10% off shopping day and will take advantage of it, go for it. If you think you will carry a balance month to month or won’t accumulate enough rewards points to get the discount, then you’re better off going for a non-retail credit card with better benefits and a more worthwhile rewards program.
Submit a question now, and maybe Credit Karma will answer your question on our next Q & A blog post!
