
Credit might not be something many people – especially young people – think about on a regular basis, but it should be something everyone thinks about daily. Your credit score is the most important number in your life – except for your Social Security Number! It doesn’t matter how much money you make, where you live, what you do, how old you are or how many kids you have; if your credit score is not good, your life will be affected in ways you cannot even imagine.
Without a good credit score, you cannot buy the home you want without cash, you cannot buy a new car unless you pay cash, and you can’t qualify for many credit cards. In fact, you might not even be hired for the job you want if your credit score isn’t high enough. You’re pretty much stuck in terms of finances if you don’t take care of your credit. For students, not having credit history is a concern. However, most college students go into college without a credit score. You have to build one, but it’s sometimes hard to do that responsibly if you don’t know how to do it. For those who have not taken care of their credit, it might seem impossible rebuild that score and make life a little bit simpler.
First time credit-builders and those looking for a second chance rebuilding your credit; Bank of America has two credit cards that might help you establish and/or rebuild your credit so that you can get a jump start on living the life you’ve always wanted.
Bank of America Band Americard Secured Credit Card
This credit card is perfect for those who have some dings on their credit report they’d like to work on fixing. You can’t erase bad credit, but you can work on making it better. There is always room for improvement when it comes to your credit, and that’s what makes this card worth checking out. This is a secured card. What that means is that you have to put money down as a deposit in order to have this card sent to you. The minimum deposit you can provide is $300.
Your credit limit could be anywhere from $300 to $4,900 depending on several factors. For one, your limit will always be at least what you put down as a security deposit. For two, your limit might be a little higher than that based on several factors. One such factor is your credit score. If it’s on the high end of less than perfect, you might be approved for a bit more. Bank of America also takes into consideration the amount of money you make and your ability to repay your card every month. These factors will help you in getting a higher card limit.
At the end of one year, provided you make all your payments on time and your credit begins to improve, you might just end up with a refund of your deposit. Continue on this path and Bank of America will eventually issue you a credit card that’s unsecured.
Bank Americard Cash Rewards for Students
This is the card to get if you’re a student. Why? Because the rewards are awesome and it will help you to build your credit based on your spending habits. You will receive 1% cash back on every single purchase you make anywhere at any time, every single time you use this card.
Cardholders also get to receive 2% cash back on every grocery store purchase up to $1,500 per quarter. You will also get to receive 3% cash back on all as purchases up to $1,500 each quarter (combined with grocery purchases). Additionally, you will receive a $100 bonus if you make $500 in purchases during the first 90 days you have this credit card. There is no annual fee, and the interest rate is only 12.99% to 22.99% depending on your credit history or lack of credit history. Additionally, all new cardholders get 1 year of 0% financing on their purchases. Interest will not accrue if you pay off the balance within that 12-month period.
Building Credit
These cards are great for building credit, if you use them correctly. Much of the reason so many people have less-than-perfect credit is because they were never taught how to appropriately think of – and use – credit. A lot of young people get a credit card and assume that it’s free money. They’re not taught the severity of improper credit usage.
When you make a late payment, whether it’s a week late or 3 minutes late, it’s late. Your credit score will be affected. You can’t max out card after card, and you can’t apply for every card in the world. One of the most common reasons people have low credit scores is that they don’t understand that every single credit application affects their score negatively. You might think it’s an awesome idea to spend Black Friday filling out card applications for store credit cards so you can save 30% off your purchase or get a free gift, but each one of those credit inquiries is going to drop your score approximately 5 to 8 points. If you apply for just 4 cards, that’s anywhere from 20 to 36 points. That’s a big drop – even if you don’t plan on ever using those cards.
Running up your card limit is also bad for your account. Yes, you have a $10,000 credit card limit, but that doesn’t mean you can use all of it and keep it maxed out. Anymore than 30% of your card limit that’s used up is considered detrimental to your credit score.
There are so many factors associated with using your credit wisely and building your score, but none more so than keeping your balances low – paid off monthly is ideal – and making on-time payments each and every month. You should also know that paying less than the minimum amount due does not work in your favor; pay it all, pay the minimum, or risk your credit score being affected in a negative manner.
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