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Back in 2010, I had to pick a card: a secured one or a high-fee 'credit builder'.
The credit builder had a $150 yearly fee. I went with the secured card from my local credit union. Put down a $200 deposit. It was slow, but my score went up 40 points in a year. Anyone else start with a secured card and have it work out?
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max7166mo ago
Consider the credit builder's fee a forced savings plan that builds history faster. That secured card locks up your cash for over a year with a tiny limit. Sometimes paying for a head start is smarter than going painfully slow.
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hernandez.gavin6mo ago
That "forced savings plan" idea reminds me of my first apartment. I had to prepay the last month's rent upfront, which felt like a huge hit at the time. But when I moved out years later, getting that month free was a nice surprise. It didn't help my credit, but it forced me to save in a way I never would have on my own. Sometimes those upfront costs do work out like a weird kind of investment.
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skyler_kelly694mo ago
I actually used one of those credit builder loans a few years back, and just a heads up - they're not exactly "faster" than a secured card in my experience. The one I did through a credit union reported as an installment loan, which is different from revolving credit, so it didn't help my utilization ratio at all. If I were starting over, I'd probably just go with the secured card and put a small recurring bill on it. Your mileage may vary, but that 12 months of locked up cash felt like forever and the score bump wasn't huge.
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tessalane6mo ago
It's like paying extra for express shipping on your credit score, right?
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