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?

4 comments

4 Comments

max7161mo agoMost Upvoted

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.

hernandez.gavin1mo 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.

skyler_kelly692d 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.

tessalane1mo ago

It's like paying extra for express shipping on your credit score, right?