Building Credit With a Visa Card

By Susan Sosbe

Overview

Having no credit history is almost as bad as having bad credit. When you have no credit background, lenders do not know if you will pay them back in a timely manner or if you are a high risk for a loan. While the goal of living a debt-free life is fine, you never know when you will need a loan. Whether you want to buy a house or a car, building good credit is a necessary foundation for your financial future. A Visa credit card will allow you to build your credit in a positive way.

Building Credit With a Visa Card

Step 1

Shop around for the best type of Visa card available. If you have no credit history, check with your bank to see what options you have for obtaining a Visa card. Those enrolled in college may qualify for a credit card specifically for students, or you may consider trying a secured Visa card.
Step 2

Look for a Visa card with a low APR, no annual fees and no maintenance fees. This will help protect against paying more than you should while you own the card. The APR will come into effect when there is a balance on the card that is not paid off within a month. The annual fee and maintenance fee will go into effect as soon as the card is activated, whether or not there is a balance.

Step 3

Apply for the Visa card either through the bank or by mail, email or phone. You can call (800) VISA-911 for Visa customer service. They can help find a card that is right for you. Or you can visit visa.com to apply on the web (see Resources).
Step 4

Make small purchases each month once you receive and activate your Visa card. Only spend what you will be able to pay off by the end of the billing cycle, which is usually a month.
Step 5

Pay off the balance on the Visa card each month. This will allow you to build up your credit. It shows that you are a responsible credit-card holder. Also, by paying off the balance in full, you won't have to pay the extra charges from the APR. Make sure you pay the bill on time to avoid late charges. Allow 5 to 10 days for the payment to be mailed and processed.

Skill: Moderately Easy
Tip: Leave your account open. Closing your Visa account once you have built a credit history by using it will lower your credit score.
Tip: Only apply for a credit card you are reasonably sure you will be approved for. If you apply and are denied, it will lower your credit score.
Warning:
Only apply for one card at a time. Applying for multiple credit cards will send up a warning flag on your credit history.
Keep in mind that the term "pre-approved" is not a guarantee that you will be approved. It only means that you have passed the credit-card issuer's pre-screening qualifications.

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