Credit Card Makeover: Christine’s Cards After Debt

What's Hot

How a Mexican Tariff Will Boost the Cost of 6 Common PurchasesFamily

Report: Walmart to Begin Selling CarsCars

How to Protect Yourself From the ‘Can You Hear Me?’ Phone ScamFamily

Trump Scraps FHA Rate Cut — What Does It Mean for You?Borrow

This Free Software Brings Old Laptops Back to LifeMore

10 Overlooked Expenses That Ruin Your BudgetFamily

Protecting Trump Will Cost Taxpayers $35 MillionFamily

8 Creative Ways to Clear ClutterAround The House

8 Tuition-Free U.S. CollegesCollege

Study: People Who Curse Are More HonestFamily

Tax Hacks 2017: Don’t Miss These 16 Often-Overlooked Tax BreaksTaxes

The 3 Golden Rules of Lending to Friends and FamilyBorrow

Porta-Potties for Presidential Inauguration Cause a StinkFamily

12 Surprising Ways to Wreck Your Credit ScoreBorrow

These Are the 25 Best Jobs in the U.S.Jobs & Work

Christine has been using sub-prime credit cards because she has no credit history. Bad idea. Here are some better ones – for her and you.

I review dozens of credit card offers each week to find the best deals. Check out more on our credit card pageWant your own credit card makeover? Email me

Christine is a young administrative assistant for a telephone sales company in Colorado. She has no credit history. Unfortunately, she’s been using sub-prime credit cards – which have harsh terms and are marketed to those with damaged or no credit – because she thought they were her only option.  Thankfully, she’s about to pay off their entire balances. So what now?

Where Christine is…

“I have two First Premier cards – one purple, one gold. I got one in October 2008, the other in September 2009. I got them because they gave me credit cards when I had no credit history.

“Currently, I have a $550 balance between the two cards. I usually pay only $5 or $10 over the minimum, but I pay on time. In the past, I usually didn’t have the money to pay the balance in full, but I was told by First Premier it is not good to pay just the minimum. I plan on paying off all these balances soon. In the future, I want rewards and something that will help build my credit. I also want lower or no annual fees. The last time I checked, my credit score was about 680.”

Where Christine needs to go…

First, Christine should pay off her balances as soon as possible – and then cancel those First Premier cards. They have annual and monthly fees that total $150 per year! In fact, they’re so full of fees, they’ve been the subject of government scrutiny.  Therefore, the sooner Christine can pay off her entire balance and cancel her account, the more money she’ll immediately save.

A better way to go would have been a secured card, also an option for those with no credit history or a bad history. (See Up-Front Credit Card Fees? Here’s a Better Option.)

Once Christine takes this advice, what next? The good news is that she’s been making her payments on time, and her credit score is now good enough that she shouldn’t have to bother with fee-heavy, sub-prime cards.

A great card for her to consider is the Chase Freedom Visa. It offers 1 percent cash back on most purchases and 5 percent cash back on charges to certain categories of merchants that change each quarter. There’s no annual fee for this card, and it’s eligible for the Blueprint program. With Blueprint, Christine can save money on interest if she ever needs to carry a balance on some purchases while paying others in full. This program also features powerful online budgeting and goal-setting features.

Bottom line…

If Christine had avoided those high-fee cards and gone with a secured card, she would’ve saved hundreds in fees – an important lesson for people building or rebuilding their credit. But now that she’s about to pay off those accounts, she can upgrade her wallet and make her credit cards pay her, instead of paying them.

Stacy Johnson

It's not the usual blah, blah, blah

I know... every site you visit wants you to subscribe to their newsletter. But our news and advice is actually worth reading! For 25 years, I've been making people richer without making their eyes glaze over. You'll be glad you did. I guarantee it!


Read Next: 6 Presidents Day Sales You Should Know About

Check Out Our Hottest Deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 1,853 more deals!