Unsecured Credit Cards for Rebuilding Credit

If you have a less than stellar credit rating rebuilding it is probably high on your list of priorities, if that is you want to be able to get a bank loan, a car loan or a mortgage. Your credit score is even sometimes taken into account by employers when you apply for a job so trying to rebuild the damage done in the past is always a good idea.

Although they are the very things that get a lot people into credit trouble in the first place if sensibly used a credit card can also be one of the best ways to rebuild a poor or damaged credit rating but only if you go about it the right way.

Secured credit cards have always been the easiest way to use a credit card to rebuild credit but many people do wonder if they can avoid having to part with the money for a security deposit and find an unsecured credit card they can be accepted for instead.

Since the credit crunch hit it has become harder and harder for those with a poor credit rating to obtain an unsecured credit card and even those with fair credit (usually 610-660 or so) can find it hard to be approved for an unsecured credit card these days. There are a few unsecured offerings left though that do offer those with poor credit a chance to start rebuilding it.

Orchard Bank Credit Cards

Orchard Bank credit cards – which are actually issued by HSBC bank – are especially designed for consumers who need to rebuild their credit profile. There are actually a number of different Orchard Bank credit cards available – and in both MasterCard and Visa versions – that are granted to people in various different credit situations.

When a consumer goes to the Orchard Bank website they do not choose which offering they wish to apply for. Instead they are asked to complete a general application form and after they have done so they are offered the card that there income level and credit score qualifies them for.

For those with very, very poor credit there is a secured Orchard Bank credit card offering but many people do find that they can qualify for an unsecured orchard bank credit card even with a damaged credit profile. The unsecured credit cards offered by Orchard Bank are the Classic, Gold and Platinum offerings and the difference between them lies mainly in the fees attached to them.

The Orchard Bank Classic Visa or Classic MasterCard comes with a $39 set up fee attached to it as well as a $29 annual fee for the first year which rises to $59 thereafter. It boasts a fairly reasonable APR of 19.90%. If you qualify for an Orchard Bank Gold Card the set up fee is cut to $19 but a $49 annual membership fee still applies and the APR is still 19.90%. Those whose credit is a little better than others may qualify for the Orchard Bank Platinum Card, that costs nothing to apply for, has a very good 14.90% APR and an annual fee of $19-$49 depending on you current credit score. Limits on all the Orchard Bank credit cards are set according to an individual’s credit score but average around $250-$350 initially.

The Orchard Bank credit cards are a great way to rebuild credit without having to lay out too much cash in the beginning but those with very bad credit (under 550) are unlikely to qualify for them and will be offered a secured Orchard Bank MasterCard instead. That card has no application fee and no annual fee but a $200 minimum deposit is required.

All in all the Orchard Bank credit cards represent a good way to use an unsecured credit card to rebuild your credit but try to pay off all of your balance in full every month. It will not only help you improve your credit score more quickly but save you a lot of money on interest fees as well.

Other than the Orchard Bank credit cards very few lenders now offer an unsecured credit card that anyone with a credit rating of under 600 can obtain. The few others that used to be available have been withdrawn by lenders. There are not even very many major lenders offering a secured card, with both Citi and Chase dropping their secured credit card offerings a while ago.

A Prepaid Card Is Not a Credit Card!

Often if you perform a Google search for a key phrase like “best credit cards for bad credit” you will reach pages with the details about a few secured credit card offerings (like the Capital One Secured MasterCard) and then a number of pre paid credit cards. It needs to be noted that a prepaid credit card is indeed handy, especially if you do not have a traditional checking account but it is essentially a debit card and using pre paid credit card will not ever make any difference to your credit score, however much you use it. Even those prepaid cards that say that if you use their BillPay services they will report your payments to a credit bureau will not usually help your credit situation as such payments are reported to an “alternative” credit bureau, not to one of the big three who ultimately control your FICO score and your credit profile.