Question: I was told from my lender to obtain a credit card to establish credit; my score right now is low so is there a good card that I could most likely qualify for? I would really rarely use it if that makes a difference.
Answer: I would suggest going to CardRatings.com. You can do
a search there for the criteria "Limited Credit" and it will bring up a number of
options for you to look over. These are mostly secured credit cards which I will
explain below. But I first wanted to make mention of your comment about rarely
using your card. I laud your wisdom; however in this case your goal is to build
credit. Unfortunately, the only way to do so is to show payment history;
therefore, you need to use the card and make payments before it can benefit
you. However, you can just make a small purchase every month or two, then pay in full to avoid interest and debt.
Over one third of your credit score is based on on-time payment history. The benefit of a secured credit card is that it allows reporting of on-time payments to the credit bureaus, which in turn facilitates building good credit history. The other benefit to a secured credit card is that it can be used just like any other credit card.
The down side is that you must open a savings account. Most banks offering a secured credit card program require that you deposit an amount of $250 or more. Your credit limit will be based on the amount of your savings.
You can also locate a branch of a major bank in your own community to get a secured credit card as most larger banks have such programs. But before applying, ask them about interest rates and whether they report to one or all three credit bureaus and how often. Also, ask if they will issue an unsecured card after a requisite period of time, thereby releasing your savings account.
Your entire purpose with this card is to build credit with on time payment. The worst thing you can do is have any late payments as this will negate any good credit you are trying to establish by using the card.