What if my credit card application keeps getting denied?

What if my credit card application keeps getting denied?

Open lines of credit in the form of credit cards is a huge part of building healthy credit. It’s important to have two open cards to get the most out of credit utilization, but this can be tricky if you don’t have positive credit history or even credit history in general. Oftentimes, applying for a traditional credit card can lead to continued denied applications and drops in score from constantly having your credit score pulled. A great way to avoid this negative spiral is to apply for a Secured Card instead.

A Secured Card functions the same as a normal credit card in that you are able to use the card to make purchases to be paid at a later date, but there are key differences. The biggest difference is a security deposit is required to open the account as credit score and history will have less impact on the application process. This security deposit is typically between $50-$200. The creditor will hold on to the security deposit for a period of about 6 months while your credit is monitored. If payments are made on time and balances are kept low, the security deposit is typically refunded in the form of an account credit. Creditors will sometimes extend additional offers to switch the line of credit to a conventional credit card and even lower interest rates at this time as well.

The best way to follow up on additional recommendations for Secured Cards is to simply call creditors directly to see what options are available. We typically recommend reaching out to companies such as Discover (1-800-347-2683), Capital One (1-877-383-4802), or your current bank. We do recommend avoiding “No Limit” cards or “Prepaid Credit Cards” such as American Express or Chime while building credit as these cards will report at 100% credit utilization and can hurt your credit scores.

For additional recommendations, schedule a free credit evaluation with our team. We look forward to speaking with you!