Can a Credit Card Really Rebuild your Credit?

Credit cards, woman holding lots of credit and debit cards. Image shot 09/2010. Exact date unknown.

Credit cards, woman holding lots of credit and debit cards. Image shot 09/2010. Exact date unknown.When money is tight and options for debt relief are few, it can be easy to start charging your credit card with little remorse or afterthought about the debt that is adding up with each transaction. It might seem like the  monthly credit card bills are not that intimidating at first, which makes it easier to continue shopping and spending. After some time, however, those unpaid balances will start to lower your credit score which can come back to haunt you later.

In the event that your credit score is less than desirable, there are options to help rebuild it back to a decent score. And while it seems counter-productive to most, there are credit cards out there that can help you to get back on track and at a stable point with your finances. The process is not easy, nor quick, but in time it will help you to develop smart spending habits that last.

Take control of your finances

Before you begin rebuilding your credit, you have to gain control of your finances and spending habits. This alone is a feat in itself and won’t happen overnight. People with poor credit should know how bad their situation has become and be realistic about what it will take to rebuild their scores. While you might not have noticed, it takes a long time to develop a bad credit report, so you won’t be able to rebuild it overnight.

But at the same time, you should recognize that you weren’t always in this financial condition. There had to be a point in which you were in good standing with your credit card debt and had it under control. This could come into handy when it comes time to look for credit card options to get out of debt. “You’d be surprised at some creditors. Providers are sometimes more flexible than you might think,” says Chris Mettler, of “If you’re a good customer with a strong credit history, then you might have some leeway to ask for a lower interest rate.”

Know what you’re getting into

As you look for credit cards to help you get your credit back in line, there are several things to take into consideration. Most importantly, you need to set limitations on your spending and on your spending limits. Find a good credit card that is set up with a fixed credit limit that matches the amount of money being deposited into your bank account. Take your time in finding a good credit card. Research and compare credit cards, and learn about the features and costs associated with each. For example, rewards cards can be tempting to us, but they often come with higher interest rates and won’t help you rebuild your credit (or get your spending habits back in line, for that matter).

Credit cards come with many terms and conditions that often include additional fees and costs than are promoted. Know what each credit card carries with it before you apply. While it might seem like you have little control and are desperate for answers, you will find it reassuring to know that more often than not, credit card providers will negotiate rates and fees with you. In the end, they want your business so use it to your advantage to find the card that is right for you.

As scary as the thought of another credit card is, if you are smart about your spending and your credit card choice, you can work to improve your credit standing and be back on track for good. Take matters into your own hands and take it one step at a time. In the long run, you can rebuild your credit while making important and dramatic changes in your financial responsibilities.

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