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No Credit Credit Cards In A Time Of Recession

As reported daily in the news our economy is in a recession. Some experts are saying it is the worst economic situation since the great depression of the 1930s. Others are saying it is just a bubble in the mortgage market. What ever the situation lenders are tightening their lending criteria making it harder for everyone to get credit.

For people that have poor credit there are still no credit credit cards available. A secured credit card can be easily obtained by anyone no matter how bad their situation because credit history is not a factor. The person puts down a deposit usually around $250 to $300 which then becomes the credit limit on the card. The deposit is returned with interest when the card is cancelled.  As reports of on time payments are maid to the credit bureau the credit score improves over time.  Since the Credit card companies have zero risk with these type cards they will always be available even in time of economic recession.

People with out credit or with bad credit should only use credit cards as a means to build or rebuild their credit. A secured credit card will only be good for small purchases anyway as the credit limit will be relatively low. As a rule of thumb, while rebuilding or establishing credit, a person should only spend 10% of their available credit limit in a singe month. So if you have a secured card with a $300 limit you should not spend more than $30 a month. Also, to get the most out of your efforts to rebuild or establish your credit you should pay the balance off each month. This will allow for the biggest positive impact on your credit score.

Having a good payment history is a good first step to improving any credit score.  Another part of the credit score equation involves the percentage of credit limit in use. Keeping this as low as possible will help build your score as high as possible.

Six months to a year of responsible credit card use should improve anyone’s credit score significantly. Eventually you should start to get better credit card offers for unsecured cards. Just make sure you continue to use them responsibly and your score should remain in the good credit category without any problem.

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