Will a credit card affect my credit score?

Having a credit card will affect your credit score, and it's up to you how. Once you find the right credit card for you make sure you pay your bill on time every month. That will help build more positive credit. Paying bills on time is generally the single most important contributor to a good credit score. Being late on any bill, for any length of time, is a possible indication of future non-payment of debt and is almost always viewed negatively by lenders. Any late payments will remain on your credit report for up to seven years.

What type of credit card will work best for me?

There are so many types of credit cards on the market you will want one that is perfectly tailored to you. Once you start looking at cards you need to decide between a Secure Credit Card, Pre-paid Card, or the standard Credit Card. All three cards will have a different value to everyone. Some cards are designed to build credit while others help build businesses. You will want to keep in mind your credit scores when you apply for different cards.

Prepaid Cards A prepaid credit card account is opened by depositing money into that account; much in the same way you would make a deposit to open a checking or savings account. Once you have money in your account, you're issued a prepaid credit card that can be used anywhere one would use a regular credit card. The best part of the prepaid credit card is that you can charge to your heart's content and you won't be in debt. The money is yours and once it's gone, you can't spend any more until you make another deposit. There are no bills and no interest charges. It's the same principle as using a debit card linked to a savings or checking account.

Secured Cards A secured card requires a cash collateral deposit that becomes the credit line for that account. For example, if you put $500 in the account; you can charge up to $500. You may be able to add to the deposit to add more credit, or sometimes a bank will reward you for good payment and add to your credit line without requesting additional deposits. All secured cards have annual fees and higher interest rates than regular, unsecured cards. If you have enough discipline to use a secured card responsibly, you have enough to use an unsecured card and set up a better savings program on your own. Use your secure card as a stepping stone.

Unsecured Cards If you have good to excellent credit you will benefit most from an unsecured credit card. An unsecured credit card is a standard credit card. They tend to have low fees, and some have no fee at all. Most report your credit history to the bureaus about every three months. If you pay on time, every time, you will continue to build your positive credit history.