credit card problems


Department Store and Gas Cards

If you are trying to rebuild your credit, gas station and department store credit cards just may be the answer that you’re looking for.  Why?  Unlike bank issued credit cards, these types of cards are generally easier to get, so even if your credit report isn’t spotless, you may be approved for one of them...continued below

It’s important to remember to use them for the purpose of rebuilding your credit report, or you could quickly find yourself in debt again.  (After all, those department stores filled with everything imaginable are pretty tempting, aren’t they?)  After you’ve been approved for a card, you should make every effort to pay off the balance in full each and every month.  Because they typically have higher interest rates, letting a balance accumulate can cost you a lot of money!  Obviously, you should pay on time, and never, ever allow a payment to be late.  If you think that you’ve waited too long on a department store credit card, simply go to the store and pay your bill in the customer service department. 

Another thing to remember is that just because these cards are easier to get, that doesn’t mean that you should have tons of them!  When a potential lender looks on your credit report and sees a lot of credit already extended—even if it’s just one of these cards—they will likely pass on your request.

Once you have used the cards to build a good credit history, you’ll have to decide whether or not to keep them.  After all, the interest rates are significantly higher than bank issued credit cards, and if your credit rating is good enough to get one, you might be better off canceling them and using a master card or visa instead. 

Here are some things to consider when applying for one of these cards: 

Most people think of gas station credit cards as only good for purchasing gas, but in fact, you’ll reap other benefits as well.  For example, what would happen if your car broke down, but you didn’t have the cash to get it fixed?  If you had a gas station credit card, you could simply charge the amount of the repair to your card!  In addition, when traveling you could use the card to eat out (most gas stations in remote areas have restaurants), or simply use it to buy snacks, suntan lotion or whatever else you need.  Finally, you may be able to get discounts on travel, hotels or rental cars, and car insurance when using your gas station credit card.  The key is to shop around for just the right card that will offer you the most benefits.

A department store credit card can offer great benefits as well.  Just imagine everything that a department store offers; appliances, rugs, furniture, clothes, jewelry, tool and cosmetics, to name just a few.  But remember not to get too carried away—after all the point is to build your credit, not go further in debt, remember? 

Again the bad thing about these types of credit cards is that the interest rate you pay will be higher than a bank issued card.  But if you watch your charges, and then pay them off every month, this shouldn’t be an issue.