You need credit to build credit and getting your first credit card is one way to get your foot in the door. Several types of companies issue credit cards, such as financial institutions and banks. If you have a bank account and you’ve been a loyal customer for years, you might start with your bank and apply for a bank credit card.
With a good credit history and credit score you can apply for mortgage loans or get an auto loan. It takes time to build good credit and you shouldn’t expect an overnight increase in your score. But with a solid payment plan and controlled spending habits, you can boost your score and become a prime candidate.
What are Bank Credit Cards?
Bank credit card refers to a credit card issued by a particular bank, such as Discover, Chase, Wells Fargo or Bank of America. There are different types of bank credit cards, as well as cards for every credit situation. Being a member of a particular bank doesn’t guarantee your acceptance, but it can help. A representative has to review your information and make a decision based on his findings. A careful review determines the type of bank credit card you qualify for, as well as your interest rate and credit limit.
The majority of banks offer unsecured credit cards to people with an acceptable credit history. This is a common type of bank credit card that does not require a security deposit. You’re pre-approved for a line of credit and you’re free to access this line of credit for as long as you maintain a good relationship with the bank. A good relationship includes paying your bills on time each month and not exceeding your credit limit.
Bank Credit Cards and Bad Credit
Bank credit cards aren’t only for people with excellent credit. In fact, several banks offer secured credit cards to people who need to build their credit history or re-establish their credit history. A bankruptcy, foreclosure or repossession can kill you credit score and history. Fixing credit problems requires rebuilding your credit, but it’s hard to rebuild if you can’t qualify for new credit. Banks, such as Orchard, offer secured bank credit cards to people who can’t qualify for unsecured accounts.
The requirements for acquiring this type of bank credit card are simple. Applicants are oftentimes approved with minimum income, as long as they’re employed and can afford the security deposit. Security deposits are required with every secured bank credit card. But, fortunately, some banks only require between $300 and $500. This results in a small credit line with the bank, but as you make timely payments and as your credit score increases, the bank will slowly increase your credit line and eventually convert your secured bank credit card to an unsecured credit card.
Whether you have a secured or an unsecured bank credit card, you can manage your account online from the comforts of your home or office. This includes checking your account balance online or scheduling an online payment. And if your bank is local, you can make payments in-person or speak to account representatives face-to-face. The sooner you apply for a bank credit card, the sooner you can enjoy the benefits.