A person is considered new to credit if they have had their own loan or credit card for less than 3 years (or have never had one at all). For example, if you are a college student, new to the country, between the ages of 18 and 21, or recently divorced with no credit under your name in the past 10 years, it is highly likely that you have limited or no credit history.

Keep in mind that even though you fit the definition of limited credit, you may not qualify for an unsecured credit card if you have mismanaged the little credit that you have. If you have missed payments on credit cards, loans, utilities bills, or anything else that is reported to the credit bureaus, applying for a secured credit card is probably your only option.

Your credit limit depends on your overall credit risk. Credit card companies do not want to allow you to charge a great deal on a credit card unless they are fairly sure you will pay it back responsibly. Believe it or not, they probably do not want to have to deal with collections and lawsuits either. There are a number of factors which contribute to your overall credit risk, such as your credit score and your income relative to your debt. Your credit score is essential because a credit card company can be confident in increasing a credit limit if you have proven capable of paying lower limits. Likewise, card companies want to see that you income can support your existing debt and credit lines before granting you additional credit.

Before you start looking at your options for credit cards, you should be aware that the Credit CARD Act, effective February 2010, added new rules for consumers under the age of 21 interested in having their own credit card. If you are under 21 years old, you will need to show that you are able to make payments – in other words show proof of income – in order to open a credit card account.

The other alternative is to have a cosigner on your credit card account. This person must be 21 years of age or older and be able to prove their ability to repay the debt incurred on your credit card account. They will assume joint liability for your credit card debt, so it will have to be someone who trusts you to make your payments on time and use your credit card responsibly. If you have opened a credit card account with a cosigner and want to increase your credit limit, your cosigner must agree to the increase in writing.

A good way for you to build your credit history if you are new to credit is to apply for a secured credit card. A secured credit card works just like a regular credit card with one major difference: a secured card requires a security deposit and your credit limit matches the amount of the deposit you put down. Since your credit line is tied to your deposit amount, a secured credit card will help you build credit history with low risk to both you and your lender – and your approval is guaranteed.

If you’re new to credit, it’s going to be difficult for you to get a regular credit card because you have no history to indicate to lenders that you are a trustworthy candidate for credit. You can prove it to them by getting a secured credit card in which your deposit acts as collateral against your credit limit. Once you have shown you can manage a secured credit card responsibly for about a year, it is likely that your credit card company will offer you a chance to apply for a regular credit card. People who are likely to have no or limited credit history include college students, recent divorcés or widows (whose credit history was in their spouse’s name), or people who have recently immigrated to this country.

Secured credit cards are designed for people with bad, limited or no credit history and use a security deposit that doubles as a credit limit to protect issuers from what are considered to be risky customers. If you do not have an outstanding balance at the time you decide to close your secured credit card, the entire security deposit is returned to you. Because issuers incur little risk with secured cards, these products typically also have low fee structures and minimal requirements for approval. All you generally need to do to open a secured credit card is provide a valid Social Security Number (SSN) and, of course, place the refundable security deposit.

Using a secured credit card is ultimately a great way to cost-effectively build or rebuild a solid credit history since secured cards report to the major credit bureaus in the same manner as any other credit card. In fact, no distinction is made between secured and unsecured credit cards on a credit report. Finally, since you can add to your deposit over time and thereby increase your spending limit, a secured card can also provide all the spending power you might need.

The first thing you need to do to move from a secured credit card to an unsecured credit card is use your secured credit card responsibly. Keep your balance low (well below your credit limit), make your payments on time, and pay off your balance in full as often as possible. If you can do these things consistently, most credit card issuers will qualify you for an unsecured credit card after about one year.

After you’ve proved your reliability, there are three likely scenarios for making the transition from a secured credit card to an unsecured credit card. The first is that you close your secured credit card account completely after being approved for a new unsecured card. As long as you close your account in good standing and carry zero balance on the card, your entire security deposit will be returned to you. Generally your credit card company will send your money in the form of a check.

Usury laws specify the maximum legal interest rate at which loans and credit card accounts can be extended.  A bill for one such law is soon to be introduced to the House of Representatives and would cap the interest rate on all credit card accounts at 16 percent.  While the goal is to lower interest rates for applicants that represent a high-risk to creditors, usury laws will actually hurt this very segment of consumers.

If passed, banks are not likely to respond to usury laws by extending credit to everyone that applies at a rate of 16 percent or lower.  The more likely repercussion is that banks will deny credit to consumers whose credit histories do no warrant an interest rate at or below the usury law’s cap. Thus, if passed, usury laws will prevent an entire segment of consumers from acquiring credit when they need it the most.

There will be several.  2010 will usher in the end of  “gotcha” rate hikes, which for so long have surprised consumers.  This and other changes, that are the result of the CARD Act, will cause the negative sentiment most consumers and Congress have towards the credit card industry to dissipate considerably, but it will be close to the end of the year before we see that happen.
Additionally, credit card companies will begin to compete with each other for customers again in 2010.  Competition in the market has been frozen because, due to record high default rates, the focus for issuers has been on loss prevention.  This will continue into 2010, but consumer credit will begin to become more readily available.

Lastly, and again due to the CARD Act, secured credit cards will make a comeback in 2010.  This is because under the CARD Act, consumers under 21 who want to apply for a credit card will either have to show proof of income or obtain a cosigner in order to be eligible for an account.  If neither of these options are achievable, secured cards will become the only option for consumers between the ages of 18-21 who are in the market for credit.

Credit card companies report you as being delinquent to the three major bureaus after you have been late on your payment for 30 days or more.  In your case, you have been late for 67 days, so your credit score will already have been affected.  Your credit card issuer reports to the three major credit bureaus every 30 days, so it is very important that you make a payment immediately to avoid being reported as 90 days delinquent, at which point your credit score will take another hit.  The effect that your late status will have on your credit score will be marginal and can be repaired if you practice responsible behavior for the next 12 months.
However, you should check your next credit card statement carefully or call your credit card company now, because your interest rate may have very well gone up (perhaps considerably) due to your late status.  Being this late on your credit card payment could have a costly effect on your wallet, depending on if or how much your interest rate has increased.  If it has skyrocketed, you should try to pay your balance off in full.  If you can’t do that, you may want to consider a balance transfer.

Your secured credit card’s security deposit is ultimately a matter of personal preference. Secured credit card issuers generally require a minimum deposit of around $200 and allow you to put down as much as $5,000 or $10,000, but the exact amount is up to you. The reason for this is that your security deposit acts as your credit limit, which ensures both that your issuer will get paid back and that you cannot spend beyond your means.

There are a few of important things to be aware of when deciding how much to deposit. First, as mentioned, the amount of your deposit will be your credit line, so you need to deposit at least as much as you wish to spend per month. Second, your credit score will benefit from low credit utilization—your monthly balance compared to your credit line—so it’s a good idea to only spend about half of your deposit amount each month. Third and finally, your credit score will also benefit from a high absolute amount of available credit, so deposit as much as you can now in order to get positive information flowing into your credit report and add to your deposit over time.

There are no credit cards that you can apply for with a co-signer.  All credit card offers, terms and interest rates are based on the credit history of the individual.  Credit cards are not like auto loans or home loans, in which co-signers are allowed.  If you are unable to get an unsecured line of credit without a cosigner, you should apply for a secured credit card where a security deposit serves as collateral against your loan in the place of a co-signer.
On the other hand, if by co-signer you mean authorized user, then yes, this is something that you can do with a credit card.  An authorized user on a credit card is someone who has access to usage on the account, but is not responsible for the bill.  The primary account holder is fully responsible for the bill. However, the activity on the card will show up on the authorized user’s credit report.

Given that you have excellent credit, you may be able to get a very low or zero percent introductory interest rate on a balance transfer credit card.  Before you fill out your new credit card application, make sure you can afford the standard APR associated with the card.  This will be your rate once the introductory offer expires.   You should compare credit cards based on other factors such as annual fees and reward programs and can do so by visiting CardHub.com.

You don’t need a co-applicant to get approved for a secured credit card.  A secured credit card will help you build credit history with low risk to both you and your lender.  The only difference between a secured card and a regular credit card is that with a secured card, your credit limit matches the amount of the deposit you put down – this usually starts around $200.00.  This deposit acts as your collateral.  Your credit limit can be as little or as much as you choose – you can increase your limit by simply adding more to the amount that you initially deposited.  The great thing about a secured credit card is that it can act as a personal savings account while building your credit history at the same time.

You can pay back the cash advance you take against your credit limit over time, just as you would any other purchase you make with your credit card.  Any cash advance you take will be added to your existing balance.  However, this is a very expensive way to borrow money, unless you plan to pay it back immediately.
This is because there is almost always a high fee associated with cash advances on credit cards, and your credit card company will begin assessing interest on the cash advance immediately, usually at a rate above 20 percent.  Unless you are sure you can afford the finance charges that are associated with cash advances, you should probably try to find another way to come up with the cash you need.

Cash back credit cards will always earn you the most relative to what you spend as far as rewards are concerned.  The standard rate for cash back reward programs is one percent, so $1 for every $100 spent.  Unlike point- or mileage-based rewards programs, with cash back rewards what you’ve earned is yours to keep and your rewards can’t be devalued in any way.  Another benefit of a cash back rewards program is that if you become unhappy with your credit card issuer and want to switch to a better credit card, you do not have to worry about losing your cash back.  You can simply request a check for your earned cash back rewards and then close your account at no risk.

It’s very hard to get the interest rate on a credit card account lowered in this economy, even if you have excellent credit and a superior track record with your credit card issuer.  Now that you’ve made two late payments, you’ve weakened your negotiating power considerably.  Your APR was also raised because – simply put – it’s a sign of the times.  Banks are doing all that they can to increase profits before the Credit CARD Act (which restricts their ability to raise rates) takes effect in February.  We would suggest a balance transfer, but any credit card application you fill out now will likely be declined given that you’ve made two late payments so recently.  The best you can do at this point is to prove your case with good behavior.  Make sure you pay your bill on time every month and pay more than the minimum amount due.  Do this for several months and then try calling your credit card issuer to negotiate your rate down.  You may see some relief.  If not, you can try transferring your balance at that time.

Most credit card issuers state that notice will be given as to whether or not a credit card application has been approved within 10-14 days, sometimes sooner.  This usually only includes business days and not the weekends or holidays.  During this time the issuer is reviewing your credit history and matching that up with a credit limit and interest rate offer.  If you haven’t heard back in 14 days, you can always call to follow up.  There are some credit cards that will give you an instant decision online, but most do not.

It depends. The only way to lose rewards is by defaulting on a credit card or closing your account before you use your earned rewards.  Rewards credit cards are almost always associated with usage on the account.  For instance, some rewards programs offer one point or one mile for every dollar spent.  If you transfer your balance to another card and have already accumulated rewards on and continue to use your original credit card account, then yes, you will still enjoy the benefits of its rewards program.  If you don’t plan on keeping your old account open any longer, then you will not get any new rewards benefits, so make sure your new account offers a rewards program that you are happy with.

On May 22nd, President Obama signed the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009 into law.  The CARD Act will change the way credit card companies do business, and it will also prohibit consumers who are under 21 years of age from getting credit cards without proof of their ability to repay their debt, or a co-signer in the form of a parent or legal guardian.  This latter point makes it foreseeable that secured credit cards will become the preferred cards for college students, the majority of whom are under 21.

With a secured credit card, undergraduates can open their accounts by putting down a security deposit, which is equal to their credit limit.  For example, if a student wanted a credit limit of $500, they would put up a $500 security deposit to cover their debt in case they became unable to pay their bill.  The presence of a deposit fulfills the letter of the new law by providing ample proof that the consumer in question will be able to repay their debt.  Thus college students will be able to receive secure credit cards without need of a parent or guardian as a cosigner.  If the consumer defaults, the credit card company simply takes the security deposit. Other than this security deposit, a secured credit card acts just like a regular credit card.

No.  An expired credit card is just like an expired library card.  You simply get a new one at the time of expiration.  Your credit card issuer should send you a new card in the mail automatically.  If you aren’t sure that this will happen, call to find out at least a few weeks before the expiration date on your card.  Once you get your new card, your credit line, balance, and interest rate should all be the same, unless you’ve been notified separately of changes in those areas.