< Back

Mailbag Monday: Rebuilding Your Credit

debitcardI’m a recent widow and was left with no insurance.  My house is being sold via short sale and I have moved to a small apartment, where I’ve paid the rent on time for the full year I’ve been here.  I would like to open a credit card, but would like a suggestion on where to go.  I know my credit rating is very poor, but I would like to get it back on track.  Do you have any suggestions?

— Jill

Hi Jill.  I’m so sorry for your loss and for the tough time that has followed.  The answer is that there are credit cards available for you.  Most of them are secured cards, so called because you deposit a sum of money (usually a couple to a few hundred dollars) to secure your credit.  The best of these report to all three credit bureaus on a regular basis, which enables you to build the sort of credit you need to eventually get a regular old credit card.

Among these, the folks at CardHub.com recommend the Capital One Secured Mastercard, which you can get with a deposit of as little as $49. If you’d prefer a card for which you don’t have to make a deposit, look at the Credit One Bank Credit Card with Gas Rewards (it gets around the deposit by charging an annual fee of $35 to $75.) Note: Your credit limits on both of these will be low, but your interest rate high.  So whatever you get, use it as a credit-building tool.  Note what your credit limit is.  Never rack up purchases that account for more than 30% of it at any time. And pay it off every single month.

Subscribe to my free weekly Newsletter

We collect, use and process your data according to our Privacy Policy.