Getting Approved for a Credit Card

Getting approved

Getting approved for a credit card can be difficult without a positive credit history working in your favor. It's a Catch-22: To obtain a credit card, you need a good credit history. But to have a good credit history, you need to establish good credit!
This no-win cycle can keep people with a non-existent, limited or negative credit history from getting approved for a credit card. But it doesn't have to if you understand the type of credit cards available and how to build a good credit history.
When it comes to credit cards, the type of card you apply for will depend on your situation. If you're a student, you'll, naturally, sign up for a student card. But if you're a non-student with a non-existent or bad credit history, a card that is secured or obtained with a co-signer may be your best option.


Secured Credit Cards

With a secured card, you secure the card by depositing cash up front in a savings account or CD. The amount of funds you place on deposit will generally match your credit line. Your card issuer maintains a lien on the deposit account, which you stand to lose if you fail to make timely credit card payments.
While many people have heard of secured credit cards, unsecured or regular credit cards are more common. With an "unsecured" card, the issuing bank has no right to take specific assets of yours if you don't pay your bill. Instead, the bank would have to sue you or force you into bankruptcy to collect.
A secured MasterCard or Visa looks just like a regular one, and the law ensures that it has all the same consumer protections. However, a secured card typically carries a higher interest rate. But a secured card can be a good deal because it offers you the convenience of having a credit card while you work on establishing or rebuilding your credit.