Credit Cards for Rebuilding Credit

Credit cards for rebuilding credit, Chapter 7 bankruptcy filings outnumbered Chapter 13 filings by a more than two-to-one ratio in 2011. Home foreclosures and insurmountable medical bills topped the reasons why many Americans are seeking this last resort for debt relief. Even if you've been dutifully paying your credit card bills every month for years, defaulting on another debt means saying goodbye to premium perks and platinum status.

Because predatory lenders scrape names and addresses from courthouse records, you've probably received mail solicitations from banks you've never heard of. They hope you're willing to tolerate spending hundreds of dollars in application fees, only to end up with an already-maxed out Visa or MasterCard. Instead, seek out only the credit cards for bad credit that can potentially help your credit score.

How Much Cost Credit Cards for Rebuilding Credit?

It's probably the only thing that could put Suze Orman, Russell Simmons and Kim Kardashian in the same category as Western Union and American Express: the prepaid debit card. As retail banks hike their monthly service fees, retailers and public figures hope that convenience and trust will inspire you to switch your daily cash management to prepaid debit. However, debit cards often carry hidden fees and other pitfalls that make many of them useless when it comes to rebuilding your credit.

Kardashian's card closed up shop after critics called attention to hundreds of dollars in annual service charges. Simmons has hinted that he's trying to find ways for his RushCard to report details of rent and utility payments to credit bureaus, but hasn't yet found a way to make his plan work. Orman's "Approved Card" includes a high yield savings account, but still charges ATM fees to customers who don't enroll in direct deposit. Western Union, Walmart, and a host of check cashing companies hope that inconvenient banking hours will cause you to start managing your cash flow through their own retail debit cards.

Credit Cards for Rebuilding Credit don't change FICO scores

Even when issuers call them prepaid credit cards, these cash accounts don't show up on your credit report. To add real value for cardholders, American Express offers a free prepaid debit card that gives you purchase protection and many of the same security benefits as their charge cards. You can reload your AmEx debit card from a linked checking account for free, but you'll pay a fee to deposit cash at Target and other participating retail credit cards for rebuilding credit.