To get credit, you have to use credit.  For those of us coming out of bankruptcy, this means putting down a couple of hundred dollars for a secured credit card.  Use no more than 30 percent of your credit and pay it down every month and you will eventually be deemed worthy of an unsecured credit card like all of the other grownups have.  

My goal is ONE unsecured card with no more than a $5,000 limit.  No more $49,000 credit lines for me, and all 4 percent APR courtesy checks will be  shredded with extreme prejudice.

Bankrate is a good place to look for good deals on secured credit cards.   Liz Pulliam Weston of MSN Money lists three criteria to look for:

  • No application fee and reasonable annual fee. Some secured cards tack huge upfront and annual charges onto their accounts; you don’t need to pay these to build your credit.
  • Reports to the major credit bureaus. You’re not doing your credit score any good unless your payment history is being reported to the three major bureaus: Equifax, Experian and TransUnion. Before you apply for a card, call and ask if the issuer regularly reports to all three.
  • Converts to an unsecured card after 12-18 months of on-time payments. Good behavior should get you upgraded to a regular credit card within a year or two.