What Happens If You Only Pay the Minimum Payment on Your Credit Card?

If you're like most Americans, you probably have a credit card and if you have a balance on your credit card, you might be wondering what happens if you're only making the mini payment on your credit card?

What Happens If You Only Pay the Minimum Payment On Your Credit Card?

If you only pay the minimum payment on a credit card, your account will remain in good standing, however, it will take you significantly longer to pay off your credit card if you're only making the minimum payment. That said, if you're experiencing financial difficulties, it may make sense to only make the minimum payment on your credit card to avoid having the account being reported as having missed payments.

If you're only making the minimum payment on your credit card, you should keep in mind that it will take you significantly longer to pay down your outstanding debt and you will end up paying a lot more interest by prolonging the repayment process.

Your minimum payment amount will depend on the balance you have on your credit card. Usually, the minimum payment you're required to pay will be based on a percentage of the balance you owe on your account. Also, there is usually a minimum payment of $25 if you owe more than $25 on your account. Typically, credit card minimum payments are based on 1% to 2% of your outstanding balance.

For example, if you owe $1000 on your credit card, you will most likely be charged a minimum payment of $25, which is roughly 2% of the balance on your credit card. If you owed $2000 on your credit card, your minimum payment would be $40, which is equal to two percent of $2000.

Although making the minimum payment on your credit card account will keep your account in good standing and avoid having late fees placed on your account, it will take you a very long time to pay off your credit card. In fact, many card issuers place warnings on credit card statements, informing consumers that only making the minimum payment significantly increases the amount of time for paying off a credit card.

You can significantly reduce the amount of time it takes you to pay off your credit card. For example, making double the minimum will reduce the amount of time it takes you to pay off your credit by half, significantly reducing the amount of interest you will have to pay on the outstanding balance.

Overall, if you were wondering whether it's okay to only make the minimum payment on your credit card, now you know that it's okay. However, if you accumulate too much debt, you could see a decrease in your credit score.

Interest Charges

If you have a balance on your credit card, you should keep in mind that as the balance on your credit card increases so does the amount of interest that you will pay on the balance. If you're only making the minimum payment on your credit card, you will be only paying off the interest on your credit card and a small portion of the principal balance, causing you to only accumulate more debt if you're continuing to use your credit card.

If you want to calculate the monthly amount of interest that you're paying on your credit card, you should divide your interest rate by 12 months and multiply it by the account on your balance.

For example, if you have a $4,500 balance on your credit card and an APR of 18% the calculations will look as follows: 18% / 12 months = 1.5% monthly interest rate. Multiply 1.5% by $4,500 = $67.50. In this example, you will be paying $67.50 in interest every month. So, if your monthly payment is $90, $67.50 would go towards interest and only $22.50 would go towards paying down the principal balance.

So, if you want to reduce the amount of money you pay in interest, you should make more than just your monthly payment. If you have the disposable income to pay off your card, try to pay off as much of the balance as you possibly can to reduce the amount of interest that you owe.

Does Making Only the Minimum Payment On Your Credit Card Hurt Your Credit Score?

No, merely making only the minimum payment on your credit card will not hurt your credit score. However, if the balance on your credit card continues to grow since you're only making the minimum payment, the increase in balance can lower your credit score.

A climbing credit card balance will lower your credit score because your credit utilization accounts for 30% of your credit score, so the greater your balance, the bigger the drop in your credit score. As a rule of thumb, you should only use up to 10% of your available credit and never exceed 30% usage.

That said, if you have experienced a drop in your credit score because of using too much of your credit limit on a credit card account, the solution to increasing your credit score is simple: pay down your credit card, reducing your credit utilization below 30% of your credit limit. For example, if you have a credit card with a credit limit of $1,000, you should keep your credit usage below $300 for the best results.

That said, if you have a high credit balance, making the minimum payment is still a good idea. This is so because it keeps your account in good standing and prevents you from paying late fees for missing the payment. That said, you should not make the minimum payment forever, you should try to make larger payments to pay down your outstanding debt.

How is the Minimum Payment On Your Credit Card Calculated?

Your minimum payment is usually calculated by multiplying your balance by 1% to 2%, also there is a floor or minimum payment that typically applies. Minimum payments usually start at $25 or $35, however, if your balance is lower than this amount, your balance will be your minimum payment. For example, if you only charged $14 on your credit card, your minimum payment would be $14. However, if you charged $200, your minimum payment would be $25 even though 2% of $200 is $4. That said, if you have a large balance, such as $3,500, your minimum payment would be 1% to 2% of that amount, brining your minimum payment anywhere from $35 to $75, depending on your card issuer.

What Happens When You Only Make the Minimum Payment?

Making only the minimum payment will keep your credit card in good standing, however, if you have a large balance on your credit card, it will take you a very long time to pay it off. You should make as large of payment as you can afford to make to reduce the balance on your credit card.

Does Paying More Than the Minimum Payment Help Your Credit?

Making more than the minimum payment can help your credit because it reduces your credit utilization. Credit utilization refers to the amount of your available credit you're using. Typically, the less of your available credit you use, the better your credit score will be. So, if you pay more than just the minimum payment, significantly reducing your credit balance, you will notice a boost in your credit score. Of course, this will be different from one person to another, depending on the other information that's on your credit report.

Frequently Asked Questions (FAQs)

1. Can you only make the minimum payment on a credit card?

Yes, you can only make the minimum payment on your credit card and your account will remain in good standing. However, if you have a large balance on your credit card, it may take many years to pay down your balance if you're only making the minimum payment. To decrease a large balance, you should aim to double your minimum payment, this will help you pay down your credit card twice as fast.

2. What is the minimum payment on a $5000 credit card?

The minimum payment on a $5000 credit card ranges from $50 to $100, depending on how your card issuer calculates your minimum payment.

3. Does making only the minimum payment hurt your credit?

Making only the minimum payment will not hurt your credit score. However, having a large balance on your credit card will lower your credit score. If you only pay the minimum payment and continue to rack up debt, your credit score will suffer. However, merely making the minimum payment on a credit card will not hurt your credit score.

4. Will the bank cancel your credit card if you only make the minimum payment?

It's unlikely that a bank will cancel your credit card for merely making the minimum payment. However, if you accumulate too much debt on your credit card and can't pay it off, the bank may lower your credit limit and close the account. You should always to keep your credit utilization at 10% and never exceed 30% to stay on the safe side.


How Long Does a Balance Transfer Take?

If you're thinking about opening a new credit card or balance transfer card, you might be wondering how long does it take to perform a balance transfer. We will discuss the answer to this question in much detail below.

How Long Does a Balance Transfer Take?

A balance transfer usually takes 5 to 7 days business days to perform. However, in some circumstances, it may take longer to perform a balance transfer. When transferring a balance from one card to another, it's important that you continue to make any payments that are due on the card. If you fail to make the payments that are due, you could cause significant damage to your credit.

People often choose to perform balance transfers because it allows them to reduce some of the interest that they pay since, most often, they are moving a balance from a high-interest rate card to a lower interest rate credit card. If performed properly, balance transfers can save you a ton of money on interest, especially if you're transferring money from a high-interest credit card to a newly opened credit card with 0% APR.

Card issuers handle balance in two different ways. Some banks issue an electronic credit to the credit card account that you want to transfer a balance from, while other banks will mail you a check that you will need to mail to your card issuer to perform the balance transfer. Electronic transfers are much faster than having to wait for a check and having to mail it to your card issuer.

To make a balance transfer, you must contact the card issuer you want to transfer your balance to and provide them with the details of the credit card account you want to transfer a balance from. If the bank approves your request to transfer your balance, they will initiate the balance transfer process. Usually, balance transfers take a few days to process. In most cases, you should be able to process a balance transfer within a maximum of 7 business days, in some circumstances, your balance transfer may take longer.

How Long Does a Bank of America Balance Transfer Take?

Bank of America states that it takes 2 to 4 business days to perform a balance transfer. However, if you're transferring a balance to a newly opened Bank of America Credit Card, the balance transfer can take up to 14 days to process. A balance transfer is complete when your Bank of America credit card shows the balance that has been transferred.

How Long Does an American Express Balance Transfer Take?

American Express states that it takes 5 to 7 business days to perform a balance transfer. That said, under some circumstances, it could take up to 6 weeks for American Express to perform a balance transfer. American Express will notify you of the status of your balance transfer by mail. To check on the status of your balance transfer, you should contact American Express and ask them about it.

How long does a Capital One Balance Transfer Take?

Capital One states that it takes up to 10 business days to perform a balance transfer. The amount of time it will take depends on whether an electronic transfer is performed or the transfer is performed by mail. Electronic transfers are much quicker than mail balance transfers. Capital One adds that a balance transfer can be approved immediately in some cases, taking just a few business days to complete a balance transfer.

How Long Does a Chase Balance Transfer Take?

Chase states that balance transfers typically take 7 business days to be processed, however, in some circumstances, a balance transfer can take up to 21 business days to perform. The amount of time it takes a balance transfer to post depends on how quickly the payee processes the balance transfer. Additionally, Chase states that it tries to process most balance transfers within 7 business days, so you can expect it to take that long.

How Long Does a Citi Bank Balance Transfer Take?

Citi Bank balance transfers take between 2 to 21 business days to be processed. That said, if you've opened a new credit card account, it will take a minimum of 14 days before your balance transfer is processed. That said, the amount of time it takes to perform a Citi Bank balance transfer is different from one person to another.

How Long Does a Discover Balance Transfer Take?

Discover states on its website that it takes 4 business days to perform a balance transfer. That said, to make a balance transfer, an account must have been open for at least 14 days. If you recently opened an account, it could take 14 days to perform a balance transfer with Discover. Discover recommends that you make any payments that are due on your account while you wait for the balance transfer process to complete.

Should You Make a Balance Transfer?

A balance transfer may be right for you if you can transfer your balance to a credit card that has a lower interest rate than the credit card you have a balance on. This is so because you may be able to save a significant amount of money on the interest that you pay.

So, if you have a credit card with a low APR (annual percentage rate), you should consider performing a balance transfer. If you already have a balance transfer credit card, you can use it or you can apply for one that permits balance transfers. Usually, when you first apply for a credit card, some card issuers give you a period (usually 12 months) during which you are not charged any interest.

Additionally, some card issuers may present you with a balance transfer offer that allows you to make a balance transfer and pay 0% interest for a predetermined period of time, which is usually 12 to 16 months.

You should try to pay down as much of your credit as you possibly can while you have an interest free period. This is so because all of the money that you pay goes towards paying down your credit card balance since you're not charged any interest.

Once the special period ends, you will be charged interest, making it significantly more difficult to pay down your balance.

Additionally, before transferring your balance to a different credit card, you should make sure that the balance transfer fees don't cancel out the money you'll save by transferring the balance.

This is so because most banks charge 3% to 5% for performing balance transfers. The fee can add up if you're transferring a very large balance from one card to another. So, make sure that the balance transfer doesn't wipe out of money you're saving.

Do Balance Transfers Affect Your Credit?

Simply making a balance transfer alone will not hurt your credit score. However, if you submit too many credit card applications hoping to be approved for one, your credit score can drop because each card you apply for will leave a hard inquiry on your account. Additionally, transferring your credit card balance to a balance transfer card, consider keeping your old account open.

This is so because credit scores tend to drop after the closure of an account that was in good standing. So, make the balance transfer and keep your credit card account open. Additionally, when making a balance transfer, transfer the balance to a credit card account that has a much higher credit limit than the amount of balance transferred. This is so because your credit utilization accounts for 30% of your credit score, so utilizing as little of your available credit is vital to improving your credit score.

What Should You Do If Your Balance Transfer is Taking Longer Than Expected?

If your balance is taking longer than expected, the first thing that you should do is contact the bank or card issuer to which you're transferring your balance to. Once you contact them ask them about the status of the balance transfer as they will have the most up to date information.

For example, if you're transferring a balance from your Chase Sapphire Credit Card to your Bank of America Cash Rewards Visa Card, you should contact Bank of America and inquire about the status of the balance transfer. This is so because it's the card issuer that is issuing the credit to the other bank, that is responsible for performing the balance transfer. In the event that the bank states that it issued the credit, you should contact the other bank to ensure that they applied the credit to your account.

How Can You Get a Balance Transfer Credit Card?

To get a balance transfer credit card with a low-interest rate, you should first identify a card that offers this and assess whether your creditworthiness qualifies you to obtain the card. If you have the required credit score, you should submit an application and see if you're approved.

Oftentimes, during the application, you will be given an opportunity to enter the account information of the account from which you want to transfer a balance. If approved, it will take a few days to process your balance transfer. If you're not given this option, you can request a balance transfer once your account is opened a credit card is issued to you. That said, you should keep in mind that the 0% APR rate is usually for a limited time that ranges from 6 to 18 months.

Should You Track the Status of Your Balance Transfer?

Yes, you should definitely track the status of your balance, ensuring that the balance transfer goes through. If you submit a balance transfer request and don't follow up, you could cause significant damage to your credit.

You could cause damage to your credit in the following scenario: suppose you request a balance transfer and for any reason, the balance transfer doesn't go through and you don't make the payment on your credit card. If more than 30 days pass from the due date of your payment and you have not made the payment, the late payment will be reported as a missed payment on your credit card account.

A single late payment can knock down your credit score by more than 100 points. So it's best to follow up to ensure that the balance transfer has gone through. If for any reason, the balance transfer has not been credited to your account before your due date, you should go ahead and make at least the minimum payment to avoid damage to your credit.

Frequently Asked Questions (FAQs)

Here are some of the most frequently asked questions we get from our site visitors:

1. Why do balance transfers take so long?

The amount of time it takes to perform a balance transfer depends on the process that the card issuer has for performing balance transfers, as well as whether the balance transfer is done by mail or electronically.

2. Can a balance transfer be denied?

Yes, a balance transfer can be denied. Your balance transfer can be denied if the balance to be transferred exceeds your credit limit or if the balance to be transferred is too large for your card issuer. You can be denied a balance transfer for a variety of other reasons.

3. Are balance transfers immediate?

No, balance transfers are not immediate. The amount of time it will take you to performance a balance transfer depends on how your card issuer handles the process, as well as whether you're transferring the balance to a new account or established account.

4. What happens when you perform a balance transfer?

With a balance transfer, the issuer of a balance transfer card issues a credit to the credit card with the balance as is done when you issue a payment on the amount. The amount credited to the credit card is taken from the balance transfer card and appears as a balance on the new card.


Can You Have a Negative Balance On a Credit Card?

If you're like many Americans, you may be wondering whether its possible to have a negative balance on your credit card. We will answer the question: Can you have a negative balance on your credit card in much detail below.

Can You Have a Negative Balance On a Credit Card?

Yes, some card issuers will allow you to have a negative balance on your credit card. A positive balance on your credit card indicates that you owe the card issuer money whereas a negative balance indicates that the card issuer owes you money. For example, if your credit card indicates that you have a -$150 balance, this means that you have a $150 credit with the card issuer. As soon as you begin spending money on your credit card, you will use up the credit on your card and will begin to accrue a positive balance. Usually, if you have a credit on your credit card, you will not have to make a monthly payment as you do not owe anything on your credit card.

You Can Have a Negative Balance On a Credit Card in the Following Situations:

Payment That Exceeds Balance

There are a number of reasons that could leave a credit on your credit card. For example, if you make a payment on your credit card that exceeds your balance, you will have a credit. Although some credit card issuers will not allow you to make a payment that exceeds your available credit, some card issuers do allow the practice, leaving you with a positive balance known as a credit.

Return & Refund

The second situation where you could see a credit on your account is if you made a purchase on your credit, you paid off your credit card, and then returned the item. In this situation, since you've paid off your card when the money is refunded to your credit card, your card account will show a credit.

Fraudulent Credit Card Charge Reversal

The third situation where you could end up with a credit card is when you pay off your credit card including paying off any fraudulent charges that were made on your account. If you later discover that fraud has occurred and ask your card issuer to remove the fraudulent charges, this will result in a negative balance on your account.

Statement Credit

Some card issuers offer their customer a statement credit after they've made qualify charges. If this happens and your card issuers issue you a statement credit, the statement credit could result in a negative balance, especially if the statement credit exceeds the balance you have on your credit card account.

Does Having a Negative Balance On a Credit Card Lower Your Credit Score?

No, a negative balance on a credit card will not lower your credit score. No negative information will be added to your credit report if you have a credit balance on your credit card. This is so because the card is paid as agreed. In fact, having a negative balance is reported as having a $0 balance, which will help your credit score because you have 0% credit utilization. The lower your credit utilization, the better your credit score will be. This is so because your credit utilization accounts for 30% of your credit score.

If you leave a negative balance on your account, you will be able to spend more on your credit card. For example, if you have a $3,500 credit limit and you have a negative balance of $350, you will be able to spend $3,850 on your credit card. This is so because you are first spending the credit on your account and you are then tapping into your credit limit. That said, leaving a negative balance on your credit card does not increase your credit limit, but it does allow you to spend more since you have a credit on your credit card account.

Should You Do Anything If You Have a Negative Balance On a Credit Card?

If you have a negative balance on your credit card account, there is nothing you need to do. In fact, as soon as you start spending money on your credit card, the credit you have will be applied to the new charges. For example, if you have a $250 credit and you charge $300 on your account, the $250 credit will be used to cover the transaction, leaving you with a balance of $50.

If you have a credit on your credit card account and you want the money, you should contact your card issuer and ask them to deposit the money into your account. The card issuer may send the money to your checking account or cut you a check in the amount of the credit on your account.

In fact, if you have a credit on your credit card, The Truth in Lending Act requires credit card issuers to refund credits that a consumer may have on his credit card within 7 business of receiving a written request from the consumer asking the card issuer to refund the credit.

If you card issuer operates out of physical locations, you can try going into your bank branch and asking a teller to give you the money in cash. Some card issuers may be willing to do this.

The quickest way to benefit from a credit on your credit card account is to simply use your credit card. If you have a credit on your credit card account, as soon as you use your credit card, you will use up the credit on your account. That said, if you need the money and can wait to get it, you can ask your card issuer to deposit the money into your savings or checking account.

What Should You Do if You Have a Credit or Negative Balance on a Closed Credit Card Account?

If you have a credit card and you've made a payment that exceeds the balance on a credit card that you have closed, your money is not lost. In fact, federal laws gives you six months to request that the card issuer return the credit to you. To get the credit, you should contact your card issuer and explain to them that you closed your credit while leaving a negative account balance on your credit card. The card issuer will then either deposit the money into your account or send you a check in the amount of the negative balance or credit.

Is It Bad To Leave a Negative Balance on Your Credit Card?

There is nothing wrong with leaving a negative balance on your account. Your credit score will not suffer as the result of a negative balance, and banks do not typically ding consumers for leaving negative balances on their credit cards. That said, leaving a negative balance does not help your credit, nor does it harm it because it's considered to be a $0 balance and your credit card will be paid as agreed.

Frequently Asked Questions (FAQs)

1. What happens if you overpay your credit card bill?

If you overpay your credit card bill, you will be left with a credit or negative balance on your credit card. Leaving a negative balance on your credit card has no impact on your credit score.

2. What happens when you get a refund on a credit card with no balance?

If you get a refund on a credit card with no balance, you are left with a credit or negative balance on your account. There is nothing wrong with leaving a negative balance on your account. It happens often to many people. In fact, once you begin using your credit card, the credit balance is applied to the charges you make.

3. How long can you carry a negative balance on a credit card?

You can carry a negative balance indefinitely. There is not limit on the amount of time that your negative balance can remain on your account. That said, if you leave your account with a negative balance for too long, your card issuer may make an effort to return the negative balance to you.

4. Will overpaying my credit card increase my credit limit?

No, overpaying your credit card will not increase your credit limit. Overpaying your credit card will leave a credit on your account but will not increase your credit limit. Your credit limit will remain the same.

5. How do I remove a negative balance on a credit card?

The quickest way to remove a negative balance from your credit card is to use your credit card. As soon as you use your credit card, the negative balance will be applied to your new charges.


How Long After Bankruptcy Can I Get a Credit Card?

If you're like thousands of Americans who have had their debt discharged through bankruptcy, you might be wondering how long after bankruptcy can you get a credit card? Having a credit card is essential for things, such as paying your bills and shopping for groceries. We will answer this question in much detail below.

How Long After Bankruptcy Can I Get a Credit Card?

You can apply for a regular credit card after filing for bankruptcy, but there is a big chance that you will be denied. The best option for getting a credit card after bankruptcy is to apply for a secured credit card. Secured credit cards are much easier to obtain than regular unsecured credit cards.

If you apply for a regular credit card after filing for bankruptcy, you are likely to be denied because bankruptcy is one of the most negative marks that can be added to your credit report. Also, if you've had your debt discharged, you probably noticed a significant drop in your credit score.

When lenders review your credit report to approve you for a credit card, they will be very hesitant to offer you a credit card because you've mishandled your finances in the past and are therefore highly likely to default on paying back your credit card.

That said, if you have been denied a regular unsecured credit card after filing for bankruptcy, you should explore the option of applying for a secured credit card.

Secured credit cards function the same way as do regular unsecured credit cards, the only difference is that to qualify for a secured credit card, you must place a security deposit (sum of money) with the card issuer to qualify for the credit card.

Your security deposit will typically determine your credit limit. For example, if you place a $700 security deposit, you will be approved for a credit card with a $700 limit. If you make your payments on time for 12 months, many card issuers will refund your security deposit and convert your credit card into a regular unsecured credit card.

So, if you were wondering how long after bankruptcy can you get a credit card, you can get a secured credit card directly after having your debt discharged by bankruptcy.

How Will Bankruptcy Affect Your Ability to Obtain a Credit Card?

To answer this question, we should first discuss the impact that a bankruptcy has on your credit. Filing for bankruptcy is one of the most negative things that can happen to your credit. Many visitors often believe that bankruptcy clears their credit of old debt, but that's not the case.

After you file for bankruptcy, the bankruptcy is added to your credit report and will cause a significant drop in your credit score. Some consumers have reported a point drop of over 150 points.

This significant point drop and the fact that bankruptcy appears on your credit report will make it difficult, if not impossible, to qualify for a regular unsecured credit card after filing for bankruptcy, especially if you're applying directly after filing for bankruptcy.

That said, as the bankruptcy ages, your credit score will recover and you may be approved for regular credit cards. That said, you should keep in mind that a Chapter 7 bankruptcy will remain on your credit report for 10 years from the date that you filed for bankruptcy.

Having said that, a bankruptcy will have the biggest negative impact on your credit score when you first file, as the bankruptcy ages, your credit score will recover slowly. Some consumers have reported being to achieve a 700 credit score in as little as 24 months after filing for bankruptcy.

If you apply for a regular credit card after filing for bankruptcy, you may be denied. If you're denied, you can always apply for a secured credit card. Secured credit cards work the same way as do regular credit cards, the only difference is that you will have to pay a security deposit to qualify.

Using Credit Cards to Improve Your Credit After Filing For Bankruptcy

If you have filed for bankruptcy and you want to improve your credit, you can use a secured credit card to rebuild your credit. To improve your credit using a secured credit card, you first need to apply for a secured card, pay your security deposit, and wait to receive your card in the mail.

Once you have your secured credit card, you should use it responsibly. You can do this by only charging as much as you can afford to pay off at the end of each month. Also, for a secured card to help your credit, you must make all of your payments in full and on time.

Usually, card issuers review secured credit card accounts on annual basis, if the card issuers sees that you've been making your payments on time and are using your credit card responsibly by keeping your balance low, the card issuer may refund you your deposit and convert your account into a regular unsecured credit card.

When it comes to your credit, your secured credit card account status is reported to the credit reporting bureaus just as would a regular credit card. By making your payments on time, you're building good credit history behind this account.

This is why opening and properly using a secured card is a great way to establish a good credit history. So, if you want a credit card after filing for bankruptcy, a secured credit is the best option for you.

Both Bank of America and Discover offer great secured credit cards that you can apply for you to begin rebuilding your credit.

An Alternative To Getting a Credit Card After Filing For Bankruptcy

If you are unable to qualify for a regular credit and a secured credit card, yet you still want to have a credit card, you should explore the option of adding yourself as an authorized user on another person's credit card. That said, once you add yourself as an authorized user to another person's credit card, their credit card's history will appear on your credit report. As such, you should only place yourself as an authorized user on a person's credit card that you trust and know is responsible enough to continue making timely payments on his account. This is so because if he fails to make a payment on the credit card, the negative information will appear on your credit report, lowering your credit score.

Credit Score Planet Frequently Asked Questions (FAQs)

1. How long after chapter 7 can I get a credit card?

Getting a regular credit directly after chapter 7 bankruptcy is very difficult, this is so because a bankruptcy was just added to your credit report and your credit score likely took a big hit after your bankruptcy. That said, you should explore the option of applying for a secured credit card, they are much easier to get since the bank is taking little risk by taking a cash deposit from you.

2. How long after bankruptcy can you get credit?

You may be able to get a secured credit card directly after filing for bankruptcy and having your debt discharged. However, getting a regular credit card will be extremely difficult directly after a chapter 7 bankruptcy.

3. How long does it take to build credit after chapter 7 bankruptcy?

It will take you approximately 24 months to build good credit after filing chapter 7 bankruptcy and that's only if you follow the best practices and open a secured credit card to start building good credit.

4. Will my credit score go up after chapter 7 discharge?

No, after a chapter 7 discharge, your credit score is likely to suffer a huge drop. This is so because bankruptcy is the most negative mark that can be added to your credit report.


Can I Get a Secured Credit Card With a 500 Credit Score?

Whether you're just starting to build your credit or you have a bad credit score, such as a 500 credit score, you might be wondering whether you can get a secured credit card with a 500 credit score? We will answer this question in much detail below.

Can I Get a Secured Credit Card With a 500 Credit Score?

Yes, you may be able to get a secured credit card with a 500 credit score because card issuers know that consumers with bad credit still need a credit card, as such, they offer consumers the ability to obtain secured credit cards where the risk to the card issuer is reduced by having you place a security deposit with the card issuer.

Secured credit cards are different from regular unsecured credit cards in that to obtain a secured credit card, you must place a deposit with the card issuer. The security deposit then determines your credit limit.

For example, if you place a $700 security deposit, the card issuer will give you a credit card with a $700 credit limit. Usually, card issuers will give you back your security within 12 to 18 months if you use your secured credit card responsibly and make your payments on time.

However, if you default on making payments on your secured credit card or you want to close the account while the card has a balance on it, the card issuer will use the security deposit to pay off your outstanding balance. The remainder of the security deposit, if any, will be returned to you.

If you have a 500 credit score, getting an unsecured credit card will be very difficult because your credit score is in the bad category. Lenders will see you as extremely risky to lend money to. As such, if you have a 500 credit score, your best option is to apply for and obtain a secured credit card. By paying a deposit, you represent a lower risk to the card issuer, and so they are more likely to allow you to borrow money from them.

When it comes to building and improving your credit, a secured credit card will allow you to build your credit just as would a regular unsecured credit card. This is so because your secured account status is reported to the credit reporting bureaus, so making your payments on time will help your credit score.

Can You Improve Your 500 Credit Score With a Secured Credit Card?

Absolutely, yes. Opening a secured credit card is one of the best ways for those who do not have credit and those who have bad credit to improve their credit. This is so because a secured credit card works the same way as does a regular unsecured credit card.

So, if you open a secured credit card and you make your payments on time, this information will be reported to the credit reporting bureaus, improving your credit score.

Those with no credit will be able to improve their credit score much more quickly than someone with bad credit. This is so because a person with no credit does not have any negative information on his credit report to drag down his or her credit score.

Nevertheless, secured credit cards are a great tool for consumers who want to build their credit from scratch or improve their bad credit.

So, if you want to improve your 500 credit score and you've been denied a regular unsecured credit card, you should explore the option of applying for a secured credit card to improve your credit.

How to Get a Secured Credit Card?

To get a secured credit card, you should first find a secured credit card, such as the Bank of America Secured Visa Credit Card or the Discover It Secured Credit Card. You should then submit your credit application online or by visiting one of the card issuers branches.

When you go to the secured credit card application, you will have to provide personal information, such as your name, date of birth, social security number, employment status, and income. Additionally, you will have to provide a security deposit to obtain the card.

Providing a security deposit is done by either giving the card issuer cash if you're applying in person or by providing your checking account information if you're applying online.

If you're approved, your security deposit will be deducted from your checking account, and your secured credit card will be mailed to you.

What Are the Best Secured Credit Cards For Someone With a 500 Credit Score?

If you have a 500 credit score, here are some of the best secured credit cards that you can apply for today.

  • Bank of America Secured Visa Credit Card - The Bank of America Secured Visa Credit Card is a great option for someone who wants a simple and straightforward credit card. This card comes with a $0 annual fee and you can deposit a security deposit of up to $4,900 for a $4,900 credit limit. The minimum deposit amount is $300 for a $300 credit limit. Also, the card comes with the ability to make contactless payments by tapping your credit card to pay. Unfortunately, this card does not come with any rewards, making it great for someone who wants a straightforward secured credit card with no annual fee.
  • Discover It Secured Credit Card - The Discover It Secured Credit Card is a great secured credit card that comes with a $0 annual fee. The great thing about this credit card is that it's one of the few secured cards that offer rewards. You can earn 1% cashback on all purchases, and 2% cashback on restaurant and gas station purchases. If you're approved for this credit card, you will be granted access to check your credit score for free.
  • Capital One Secured Mastercard Credit Card - The Capital One Secured Credit is a great option for someone who wants a simple credit card with a $0 annual fee. This card does not offer rewards but can be had for as little as a $49 security deposit that will unlock a $200 credit limit. You can increase your security deposit for a higher credit limit. The page for this credit card also states that every 6 months your account will be reviewed by Capital One. If you've used your card responsibly and you've made your payments on time, Capital One will consider raising your credit limit without you having to increase your security deposit.
  • First Progress Secured Credit Card - The First Progress Secured Credit Card comes with a $49 annual fee, however, the card more than makes up for it with an ultra low-interest rate of 9.99%. The other secured credit cards that we have included all come with a high-interest rate that ranges from 22.99% to 24.99%. So, if you're looking for a card with a low-interest rate, this card is the right one for you. The great thing about this card is that no minimum credit score is required, so whether you're just starting to build credit or you want to improve your bad credit, this is the right card for you.

How To Improve Your 500 Credit Score?

If you aren't approved for a regular unsecured credit card because you have a 500 credit score, there are a number of things that you can do to improve your 500 credit score.

Payments

The best thing that you can do to improve your 500 credit score is to make all of your credit card and loan payments on time. This is so because your payment history makes up 25% of your credit score. So, making your payments on time should boost your credit score.

Credit Utilization

The second best thing you can do to improve your credit score is to reduce the balances on your accounts. This is so because 20% of your credit score depends on the amount of your avaialble credit that you're using. The higher your balances, the lower your credit score will be. As a rule of thumb, you should strive to keep your credit utilization between 5% and 10% and to never use more than 30% of your available credit. Reducing your account balances may boost your credit score.

Reduce Applications

To improve your 500 credit score, you should refrain from submitting too many credit card and loan applications within a short period of time. This is so because every time you apply for a credit card or a loan, a hard inquiry is placed on your credit report. Although a single hard inquiry will only lower your credit score by 5 to 10 points, racking up too many hard inquiries can significantly reduce your credit score. So, to improve your credit, avoid applying for unnecessary credit cards and loans.

Keep Old Accounts Open

To improve your 500 credit score, you should keep your old accounts open. This is so because your overall average account age affects your credit score. The older your accounts, the better your credit score will be. So, although it may be tempting to close an old account or credit card, you should keep it open to improve your credit.

Check Your Credit Report

If you're not already in the habit of checking your credit report, you should periodically check your credit report. You can do this by signing up for any of the free credit report services currently available. Review your credit report and dispute any inaccurate items that appear on your credit report to improve your credit score.

Credit Score Planet Frequently Asked Questions (FAQs)

1. What is the Difference Between a Secured vs Unsecured Credit Card?

The only difference between a secured vs unsecured credit card is that a secured credit card requires you to place a security deposit with the card issuer before your credit card account is opened for you. Other than that, a secured credit card functions the same exact way as does a regular credit card

2. Can I get a regular credit card with a 500 credit score?

You may be able to get a regular credit card with a 500 credit score, however, it will be very difficult to get approved with such a low credit score. A 500 credit score is considered as very poor, so most card issuer will probably deny you if you apply for one.

3. How fast can you build credit with a secured credit card?

If you're just starting to build your credit, you can build credit with a secured credit card in as little as 6 months, however, if you're fixing your bad credit, it may take longer to improve your credit score. Some consumers have reported being able to improve their bad credit within as little as 12 to 18 months after opening and making timely payments on their secured credit card.

4. What is the minimum credit score for a secured credit card?

There is no set minimum credit score for a secured credit card. Card issuers offering secured cards know that consumers who apply for these cards are either starting off or have bad credit. As such, so long as you have the money for the security deposit, you should be approved for a secured credit card.


What Credit Score Is Needed For a Home Depot Credit Card?

Whether you're doing your own home improvements or you're a contractor who makes frequent visits to the Home Depot Store, you will benefit greatly from opening a home depot credit card. That said, we often get asked what credit score is needed for a Home Depot Credit Card? We will answer this question in much detail below.

What Credit Score Is Needed For a Home Depot Credit Card?

Consumers have reported that a credit score of 640 or higher is needed for you to get a Home Depot Credit Card. That said, some users have reported that they were approved for a Home Depot Credit Card with a 600 credit score. If you're unsure about whether you will be approved for a Home Depot Credit Card, Home Depot's website gives you the ability to check whether you're pre-approved for their credit card prior to applying.

If you're pre-approved before applying, you will likely be approved if you apply for the credit card. Checking to see whether you're preapproved for the Home Depot Store Credit Card does not affect your credit score because a soft inquiry is placed on your credit report. Soft inquiries do not hurt your credit.

That said, if you choose to apply for the Home Depot Credit Card, a hard inquiry will be placed on your credit report. A single hard inquiry can lower your credit score by 5 to 10 points, however, this impact is negligible and your credit score will likely quickly recover from the point drop.

Does Checking Whether You're Pre-approved for the Home Depot Credit Card Affect Your Credit Score?

No, checking to see whether you're pre-approved for the Home Depot Credit Card does not affect your credit score because a hard inquiry is not added to your credit report. When you check to see whether you're pre-approved for a home depot credit card, a soft pull is made to review your credit report. Soft pulls, commonly known as soft inquiries, have no impact on your credit.

Does Applying for the Home Depot Credit Card Affect Your Credit Score?

Yes, applying for a Home Depot Credit Card can lower your credit score by a few points because a hard inquiry is added to your credit report when Home Depot's partner Citi Banks reviews a copy of your credit report to make a decision on your credit application. If you've ever applied for a Home Depot Credit Card, you've probably noticed a hard inquiry labeled as "Home Depot CBNA" appear on your credit report. This is totally normal because Home Depot has partnered with Citi Bank to provide you with the Home Depot Credit Card.

That said, you should not worry too much about a hard inquiry as it may lower your credit score by a few points, and your credit score will recover fairly quickly after just a few months of responsibly using your credit card and paying it off on time.

Benefits of the Home Depot Credit Card

If you're thinking about applying for the Home Depot Credit Card, here are some of the benefits of this credit card:

  • You can finance a purchase of $299 or more for 6 months
  • You can finance promotion item purchases for up to 24 months
  • You will be given 1 year to make returns on any item purchase from Home Depot
  • If someone makes an unauthorized charge using your Home Depot Credit Card, you're not liable for such charges
  • $0 annual fee for the Home Depot Credit Card

Bottom Line

For you to qualify for the Home Depot Credit Card, you must have a fair credit score. Many consumers have reported that the Home Depot Credit Card requires applicants to have a minimum credit score of 640. That said, there are some reports of consumers with a 600 credit score being able to qualify for this credit card. If you're unsure as to whether you'll qualify for a Home Depot Credit Card, you can check whether you'll be approved prior to applying for the credit card by heading over to the Home Depot Website. If you have any general questions or comments, please feel free to leave them in the comments section below.


Can I Get a Credit Card With a 500 Credit Score?

If you're just starting to build your credit or you have poor credit, you still need a credit card. Almost all shopping and bill payments are done online. So, can you get a credit card with a 500 credit score? We will discuss the answer to this question in much detail below.

Can I Get a Credit Card With a 500 Credit Score?

With a 500 credit score, it will be very difficult to get a regular credit card because a 500 credit score is considered to be poor, and most major card issuers will likely deny your credit card application as they require a fair or good credit score. That said, although you may not be able to qualify for a regular unsecured credit card, you may be able to qualify for a secured credit card.

A secured credit card works exactly the same exact way as a regular credit card, however, to get a secured credit card, you must place a security deposit with the card issuer. The security deposit you place will usually determine your credit limit.

For example, if you want a secured credit card with a $500 limit, the card issuer will require that you place a $500 security deposit at the time you apply for the credit card.

If your application for a secured credit card is approved, the card issuer will deduct the security deposit from the account you added to your credit card application. The card issuer will then keep the security deposit and only use it if you fail to pay the credit card.

However, if you make all of your payments on time, card issuers will usually return the security deposit to you within 12 to 18 months of opening your secured credit card. Also, if you have an excellent payment history, the card issuer may convert your secured credit card into a non-secured regular credit card and return your security deposit to you.

Also, if for any reason you decide to close your secured credit card, your security deposit will be returned to you so long as your credit card has a $0 balance at the time of account closure.

Credit Cards You Can Get With a 500 Credit Score

As previously mentioned, it will be extremely difficult to qualify for a regular credit card with a 500 credit score, so here is a list of secured credit cards that are suitable for someone with a 500 credit score:

  • Bank of America Secured Credit Card
  • Capital One Secured Mastercard
  • Discover it Secured Credit Card
  • OpenSky Secured Visa Credit Card
  • First Progress Secured Credit Card

How Getting a Secured Credit Card Can Help You Improve Your 500 Credit Score

Getting a secured credit card will definitely help you improve your 500 credit score because secured credit cards function the same way as does a regular credit card. As such, they can help you improve your credit whether you're just starting off or you need to repair your credit.

That said, if you're using a secured credit card you will be able to improve your 500 credit score much quicker than would a person who has bad credit and wants to improve it.

That said, regardless of whether you're repairing your credit or building it from scratch, you can use a secured credit card to build your credit just as you would with a regular credit card.

So, if you're approved for a secured credit card, make sure to spend only as much as you can afford to pay off at the end of the month and make all of your payment in full and on time.

If you're just starting off, you should see a significant improvement within the first six months, however, if you're repairing your credit, it will take you a little longer and you should expect an improvement within 12 to 18 months of using and paying off your credit card on time.

Improving a 500 credit score is very important if you want to qualify for credit cards and loans at reasonable interest rates and favorable repayment terms. So, use your secured credit card responsibly and make your payments on time to begin improving your credit.

What Do You Need To Open a Secured Credit Card?

If you have a 500 credit score and can't get a regular unsecured credit card, you should open a secured credit card.

To open a secured credit card, you will need to fill out a secured credit card application by adding basic information, such as your name, address, social security number, income, and your banking information. Your banking information is required so that if you're approved for a secured credit card, the security deposit will be deducted from the account that you provided.

That said, you should keep in mind that the security deposit that you place with the card issuer will determine your credit limit. For example, if you place a $700 security deposit, the card issuer will give you a $700 credit limit.

You should keep in mind that the security deposit will not be used as a payment on your credit card, instead, the security deposit is used to compensate the card issuer in the event that you have a balance on your credit card and you stop making payments on your account.

So, if you default on paying off the credit card, you will give up your security deposit and you will cause significant damage to your credit. So, make sure to make your payments in full and on time.

Things You Can Do To Improve Your 500 Credit Score To Get The Credit Card That You Want

If you have a 500 credit score and you want to get a regular unsecured credit card, here are some tips that you should implement to improve your credit score.

Payment History

The first thing that you should do to improve your credit score is to make all of your credit card and loan payments on time. This includes making payments on your secured credit card on time. Your payment history accounts for 35% of your credit score, so making all of your payments on time will significantly improve your credit score. Missing even a single payment can cause significant damage to your credit. So, make your payments on time and you will notice an improvement in your score.

Balances

The second thing you can to improve your 500 credit score is to pay down the balances on your accounts. Your credit utilization (how much of your available credit you're using) accounts for 30% of your credit score. So, the more you can lower your balances, the more of an improvement in your credit score you will see. As a rule of thumb, you should keep your credit utilization between 5% to 10% but never exceed 30%. If your credit utilization exceeds 30%, you will notice a significant drop in your credit score. So, pay down your balance to improve your 500 credit score.

Application

To improve your 500 credit score to get the credit card that you want, you should avoid applying for too many credit cards and loans within a short period of time. This is so because every time you submit a credit application, a hard inquiry is added to your credit report. While a single hard inquiry will not lower your credit score by much, having too many hard inquiries on your credit report within a short period of time will significantly lower your credit score. So, avoid submitting too many applications and you should notice an improvement in your score.

Account Age

If you have old accounts that are open, you should leave them open to increase the overall age of your accounts. The average age of your accounts makes up 15% of your credit score. The older your accounts, the better your credit score will be. So, if you have an old account that you barely use and want to close, you should leave it open to avoid lowering the average age of your accounts.

Credit Report

If you're not already in the habit of checking your credit report, you should periodically check your credit report to ensure that there is no negative information lowering your credit score. If you find negative information that does not belong to you, you should file a dispute with the credit reporting bureau reporting the incorrect information to have it removed from your credit report so that it no longer pulls down your score.

Bottom Line

At this point, it should be clear that getting a credit card with a 500 credit score will be very difficult. So, instead of applying for a regular credit card, you should apply for a secured credit card. Secured credit cards work the same way as does a regular credit card, and so they will allow you to build your credit and improve it. Once you've improved your credit score, you can then apply for a regular credit card.


Can You Have Two of the Same Credit Card?

Almost every adult in the United States has a good credit card. Some of us may even have a credit card that we love and maybe thinking about opening an additional card of the same type. So, can you have two of the same credit card? We will answer this question in much detail below.

Can You Have Two of the Same Credit Card?

No, most card issuers will not permit you to have two of the same exact credit card. However, some card issuers offer different variations of the same card, and so you may be able to qualify for two of the same but slightly different credit cards. That said, although it's not totally unheard of for a person to have two of the same credit cards, most card issuers do not permit consumers to have two of the same credit cards.

Why would someone want to have two of the same credit card?

Some credit cards offer extremely good rewards or benefits, which makes having two of them better. For example, some airline credit cards offer cardholders the ability to have a passenger fly with them at a reduced rate or for free, so having two of the same credit card allows them to have two passengers fly with them at a reduced rate or for free. Airlines and card issuers have noticed this trend, and so some card issuers have prohibited consumers from holding two of the same credit card.

That said, there are ways around this. For example, if you have or wife or a girlfriend and you often travel with them, instead of you having two of the same credit card, open an account for them and they can enjoy the same perks you do.

As such, although having two of the same credit card may offer you additional rewards, credit card issuers know of the practice and have limited their exposure to paying out too many rewards and benefits by permitting consumers to only having one credit card of the same type.

Here Are Some Methods That Will Allow You To Have Two of the Same Credit Card

Different Variations of the Same Card

Some card issuers offer consumers different variations of the same credit card. These different variations may offer your the ability to hold two of the same credit card.

For example, Citi offers its American Airlines Credit Card in different variations, a visa American Airlines Credit Card, as well as an American Airlines American Express Credit Card.

Both cards offer the same benefits and rewards, the only difference is that one of the cards is a Visa card and the other is an AMEX card.

If you find a card issuer that provides such variations, you may be able to hold two of the same credit card.

That said, you should not apply for both cards at the same time. To approve your odds of being approved for both credit cards, apply for one of them, wait two to three months and then apply for the second card.

By doing this, you should be able to have two of the same credit cards.

Citi Bank is not the only card issuers that offers different variations of the same credit card. Bank of America and Chase offer different variations of the same credit card. If the different variations don't appear online, visit your local branch and they'll have access to the different variations and they'll be able to submit your application for the credit card that you want.

Authorized User

If you want to have two of the same credit card, one of the best ways to do this is to have someone else, such as your dad, mom, spouse, or girlfriend apply for the same credit card and add you as an authorized user on the account.

Once they've added you as an authorized user, you will be issued a credit card with your name on it just as would the primary cardholder. That said, the primary cardholder will be responsible for making payments on the account.

That said, you should be careful when adding yourself as an authorized user to another person's account because although the primary cardholder is responsible for making payments on the account. If they miss any payments, your credit will suffer because the account will appear on your credit report. So, only add yourself as an authorized user on another person's account that you know is responsible and will make timely payments on the account.

Applying For the Same Credit Card After Closing the Same Card

If you have a credit that offers rewards and a sign-up bonus and you closed your account, you may be approved for the same card again. However, some card issuers, such as American Express will not give you a sign-up bonus unless a certain amount of time has passed since you first received the sign-up bonus.

American Express and other card issuers do this to prevent consumers from constantly closing their accounts and re-opening them simply for the sign-up bonus.

That said if you have a specific credit card that you like and you close your account. If you wait for the specific period of time, you will be able to open the same credit card account again and qualify for any sign-up bonuses the card issuer is offering.

For example, American Express states that you can only qualify for a sign-up bonus once 24 months has passed since you first opened your account, not closed the account.

So, if you've had a credit card for 3 years and you closed your account, you may be able to open the same card and receive the sign up bonus yet against. However, to qualify for the credit card, you will need to have good credit. So, as long as you've made all your payments in full and on time, you should qualify for the same credit card.

That said, the waiting period is different from one card issuer to another. For example, to qualify for the sign-up bonus offered by the Chase Sapphire Credit Card, you will have to wait for 48 months from the date you received the first sign-up bonus to qualify for another one.

Credit Score Planet Frequently Asked Questions

1. Can you have two of the same exact credit card?

Some card issuers may allow you to have two of the same exact credit card, however, most card issuers prohibit you from having 2 of the same credit card.

2. Can you two credit cards from the same bank?

Yes, you can have more than one credit card from the same bank. Some banks offer different credit cards, and so you can have multiple credit cards from the same bank. That said, the credit cards will be different as most banks do not permit consumers to have two of the same credit card.

3. How long should you wait to apply for a second credit card?

You should wait at least 6 months to apply for a second credit card. Spacing out your credit card applications prevents the hard inquiries resulting from the applications from hurting your credit.

4. What happens if you apply for the same credit card twice?

If you apply for the same credit card twice, one of the credit cards may be denied as most card issuers only permit consumers to have one of the same credit card.

5. Can you apply for the same credit card that you already have?

Although you can apply for the same credit card that you already have, your card issuer will likely deny the application because most card issuers only permit consumers to have one of the same credit card. That said, if the card is slightly different, your application may be approved.


Do Secured Credit Cards Help Your Credit Score?

If you're like most Americans and you're just starting to build your credit or want to rebuild it, you may be exploring the option of applying for a secured credit credit card. We often get asked whether secured credit cards help your credit score? We will answer this question in much detail below.

Do Secured Credit Cards Help Your Credit Score?

Yes, secured credit cards are an excellent tool that can help you raise your credit score. That said, for a secured credit card to help your credit, you must use them responsibly and make your payments on time. You should try to pay off the entire balance at the end of your billing cycle, and at a minimum, you should make the minimum payment. Missing even a single payment on a secured credit card could cause significant damage to your credit score.

The best way to help raise and help your credit score using a secured credit card is to spend only as much as you can afford to completely pay off at the end of the month. Another tip is to keep the balance on your secured credit card below 10% and to never exceed 30%.

For example, if you have a secured credit card with a $1,000 credit limit, you should keep the balance on your credit card below $100 and never exceed $300. If you leave a high balance on your credit card, your credit score will suffer because the credit reporting bureaus lower the credit score for persons who exceed 30% credit utilization.

Many people have improved their credit score using a secured credit card by using it for a few bills and then paying off the credit card completely. This shows your card issuer that you're using your secured credit card responsibly by charging only what you can afford to completely pay off at the end of the billing cycle.

Within 6 to 12 months of using your secured credit in this manner, you may be able to get your security deposit back and your account converted into a regular unsecured credit card if your card issuer provides them.

What is a Secured Credit Card?

A secured credit card works exactly the same way as does a credit card, however, to obtain a secured credit card, you must place a security deposit with the card issuer. The card issuer will return the deposit to you within 12 to 18 months so long as you make all of your payments on pay off your balance before closing your secured credit card.

To open a secured credit it, you will be asked to place a security deposit using your checking or savings account when you apply for the credit card. If you're approved, the card issuer will deduct the security deposit from your bank account and issue you a credit card that's usually equivalent to the security deposit you placed with them.

For example, if you placed a $700 security deposit, you will be issued a credit card with a $700 credit limit. You would then use the secured credit card and make payments on it just as you would with a regular unsecured credit card.

If you use your secured card responsibly by only charging what you can pay off at the end of the month, and paying off your credit card prior to the due date, your card issuer will return your security deposit to you within 12 to 18 months of using your credit card.

Some card issuers will even go a step forward in that they will convert your unsecured credit card into a regular credit card offered by them. This will allow you to keep the good credit history that you've build with your secured credit card.

Should You Apply For a Secured Credit to Help Your Credit?

If you are someone who is just starting to build their credit or have bad credit, a secured credit card is one of the best ways to help build your credit, especially if you were denied a regular unsecured credit card.

If you do not have credit, meaning you're just starting to build your credit, you will see a positive impact on your credit score much quicker than someone who has bad credit and is trying to rebuild with a secured credit card. This is so because, for those who are just starting off with building their credit, there is no negative information to drag your credit score down.

After you've build and attained a good credit score, you can either ask your card issuer to convert your secured credit card into a regular unsecured credit card, or you can apply for a regular credit card while keeping your secured credit card open.

How Long Does it Take to Build Good Credit Using a Secured Credit Card?

If used properly, you can build credit using a secured credit card within three to six months. That said, if you're starting to build your credit from scratch, you will be able to build credit using a secured credit card much more quickly than someone who has damaged their credit and wants to rebuild it using a secured credit card.

If you have bad credit, it will take you a bit longer to build credit using a secured card. Some users have reported seeing an improvement in their bad credit within 12 to 18 months of responsibly using paying off their credit card. The time it takes you will vary depending on how much damage you've done to your credit.

How Do Lenders View Secured Credit Cards?

If you apply for a credit card or loan in the future and the lender reviews your credit report to determine your creditworthiness, a secured credit card that has good credit history is viewed just as favorable as is a regular unsecured credit card.

To see how a secured credit card has helped your credit card, you should check your credit report and credit score. Most banks now offer you the ability to track your credit score through their online portal. However, if your bank does not offer this feature, you can still check your credit report and score by using Credit Karma, it's totally free.

How Long Does it Take to Get Your Secured Credit Card?

Usually, once the card issuer approves you, it takes a 3 to 7 business days for you to receive your secured credit card. The time it takes to get approved varies, some approvals are instant while other credit applications must be reviewed by an agent before being approved or denied. It really depends on the information in your credit report. If you're just starting to build your credit and have no negative items on your credit report, you may be approved more quickly than someone who has negative marks on his report.

Credit Score Planet Frequently Asked Questions

1. How long does it take to build credit with a secured credit card?

If you're just starting off with building your credit from scratch, you can have a good credit score within 3 to 6 months of using and making timely payments on your credit card. However, if you have bad credit and negative items on your credit report, it could take 12 to 18 months to build good credit using a secured credit card because the negative information will lower your credit score.

2. What is the best-secured credit card?

The two secured credit cards that we recommend are the Bank of America Secured Visa Credit Card and the Discover it Secured Credit Card. These two cards are excellent for someone who want to build or improve their credit while being unable to obtain a regular unsecured credit card.

3. Can you be denied a secured credit card?

Yes, a card issuer can deny your secured credit card application.

4. Why would my secured credit card application be denied?

You can be denied a secured credit card for having negative information on your credit report, such as a foreclosure, bankruptcy, or other negative information. Also, if your income is too low, you may be denied.


Best Way to Pay Off Credit Cards to Improve Credit Score

If you're like most of us, you probably want to do whatever is possible to improve your credit score since everything from buying a home to leasing a car requires a good credit score. We often get asked what is the best way to pay off credit cards to improve your credit score? We will answer this question in much detail below.

What is the Best Way To Pay Off Credit Cards To Improve Credit Score?

The best way to pay off your credit is to pay off the entire balance on your credit card as quickly as possible and keep the balance as low as possible. Many people believe that leaving a balance on their credit cards helps their credit, but this is not true. Your credit score benefits the most from a low credit card balance.

This is so because your credit utilization accounts for 30% of your credit score. The lower your credit utilization, the better your credit score will be. Credit utilization refers to the amount of available credit you're using. The lower your account balances, the less credit you're utilizing, and the better your credit score will be.

That said, we understand that not everyone can completely pay off their credit card and that's totally fine. If you cannot pay off your credit card, you should at least make the minimum payment so that you don't hurt your credit. The minimum payment is the least amount of money that you can pay to keep your credit card account in good standing.

Failing to make the minimum payment on your credit cards will cause significant damage to your credit. This is so because failing to make the minimum payment will result in your account be reported as late to the credit reporting. Having a late payment can cause a significant drop in your credit score.

Should I Pay Off My Credit Card or Leave a Balance?

We often get asked this question and the truth is that leaving a balance on your credit card will not improve your credit score. Your credit score benefits the most from lowering the balance on your credit card. So, the next time you hear someone saying that leaving a balance on your credit card helps your credit, now you know that statement is not true.

This is so because your credit utilization accounts for 30% of your credit score. The lower your credit utilization, the better your credit score will be. Decreasing your credit utilization refers to lowering the balances on your accounts, the lower the balances, the better your credit score will be.

As a rule of thumb, you always want to keep your credit utilization below 30%. If you exceed or use more than 30% of your available credit, you will notice a drop in your credit score.

For example, if you have 3 credit cards with a total credit limit of $10,000, you should try to avoid leaving a balance of $3,000 or more. If you exceed a $3,000 balance, you will notice a drop in your credit score. So, keep your credit card balances as low as possible to help your credit and avoid a drop in your credit score.

Ideally, you should keep your credit card balances between 5% and 10% of your available credit, and never exceed a 30% credit utilization for the best impact on your credit score.

Making Only the Minimum Payment on Your Credit Card

If you want to improve your credit score, you should pay down your account balances. That said, we understand that not everyone has the cash to pay down their account balances. At a minimum, you should always make the minimum payment on your credit card. Failing to make the full minimum payment will cause significant damage to your credit.

Also, if you fail to pay the minimum payment, your card issuer may charge you late fees, as well as impose a penalty APR rate that will significantly increase the amount of interest that you will pay on your credit card debt.

That said, if you cannot completely pay off your credit cards, you should not stress out too much as the average American carries more than $5,000 of credit card debt. That's an amount that's not easy to come up within a short period of time.

That said if you have extra cash and want to improve your credit score by paying off your credit cards, pay off as much as you can afford to pay off.

When paying off your credit cards, you should pay off the credit cards with the highest interest rates first as this will make paying off your credit cards quicker and will save you money in the long run.

CSP Pro Tip: If you only make the minimum payment, it will take you a very long time to pay off your credit card debt. So, always make a payment that exceeds your minimum payment. This will drastically reduce the amount of time it takes to pay off your credit card and this will save you a ton of money in the long run.

How To Pay Off Credit Card Debt?

There are a number of different methods to pay off credit card debt. Here are some of these methods:

  1. Snowball Method - This method involves making all of the minimum payments on your credit cards and paying more than the minimum payment on the credit card with the lowest balance. Once you've paid off the credit card with the lowest balance, you should move on to the next credit card with the next lowest balance. Many people choose this method because making progress on paying off debt will motivate you to continue paying down your debt.
  2. Avalanche Method - The avalanche method is similar to the snowball method, but instead of targetting credit cards with the lowest balances, you will first pay off the credit cards that charge the highest interest rates first. This method will save you more money in the long run since you will end up paying less interest. However, some people still choose the snowball method because they feel like their making more progress by completing paying off the credit cards with the lowest account balances.
  3. Debt Consolidation - The third option that you have to pay off your credit card debt is debt consolidation. Debt consolidation involves taking out a personal loan and using those funds to pay off your credit card debt. Debt consolidation can save you a ton of money because the interest rates on personal loans are typically much lower than those charged by credit card companies. That said, you will need to have good credit to use this option as most lenders will not lend you money if you have poor credit. In addition to paying less interest, debt consolidation may be a good option for you because it will leave you with a single payment to make, you will no longer have to worry about paying off several credit cards.

By How Many Points Will Your Credit Score Improve After Paying Off Your Credit Cards?

Paying off your credit cards and lowering the balances on your credit cards can improve your credit score by more than 50 points. However, the improvement you will notice will vary depending on the information in your credit report. Some people may notice a smaller improvement while others may notice a bigger improvement.

That said, if you pay down your credit card balance, please share your experience and let us know by how many points your credit score improved after paying down your credit card balances.

Credit Score Planet Frequently Asked Questions

1. How much will your credit score increase after paying off your credit cards?

the number of points your credit score will increase is different from one person to another depending on the information in your credit report. That said, some people who have paid down their credit cards have noticed an increase of more than 50 points. Your mileage will vary depending on how significant of a reduction in your account balance you've made, as well as how you've handled other debts.

2. How can I raise my credit score?

You can raise your credit score by performing the following:

  • Making all of your payments on time
  • Reducing the balances on your credit cards and loans
  • Keeping old accounts open
  • Not applying for too many credit cards and loans
  • Periodically checking your credit report and disputing any incorrect information

3. Which credit cards should I pay off first?

You should pay off credit cards with the highest interest rates first to save money. That said, some people prefer paying down credit cards with the lowest balances first because paying off debts gives a sense of accomplishment. That said, choose the method that best suits you.

4. Is it a good idea to pay off your credit cards?

Yes, paying off credit cards is a good idea. So, if you have cash that you've set aside and don't need, you should use it to pay off your credit cards and reduce your account balances.

5. Is it better to pay off your credit card or keep a balance?

Paying off credit cards is better than keeping a balance. This is so because the credit scoring models reward those who have low credit utilization.