Have you heard of secure and unsecured credit cards? You see them advertised everywhere.
But what is the difference? A secure credit card means you send the bank your money, whether $50, $500, $1000, whatever amount you want, they will put it in your account, and you can spend it.
You can't overdraw it because it's not a debit card.
But wait, isn't the purpose of a credit card to *borrow* money, not borrow your own money? Yes, that's true.
But the purpose of this is not to borrow from the bank, it is designed to help you establish your credit, without actually damaging it.
You are using money you have, and after you have a proven track record, you will be able to borrow the banks money.
The main point of these cards is so you can have a credit history without looking like you need to borrow.
An unsecured credit card is just the opposite.
A bank trusts you with their money, adds interest, gives you a card, and you borrow money up to a determined amount, with interest.
You don't have to send them any money to put on an account since this is entirely using their funds.
Like a secured credit card, these will also help you build your credit history.
Which card to get will depend on your credit history, but make no mistake, you don't need a credit to build history.
Any time you pay bills, electric, phone, cable, garbage, or anything that is a utility, those payments go on your credit report.
Banks just want you to think you need a credit card.