Credit Help

Three Ways to Help Those Who Cannot Apply for a Credit Card

Christmas time is close and everyone is looking for a miracle. Unfortunately, you cannot usually hope for a miracle of finding a bag full of money or getting credit you don't really qualify for. Let's face it - credit is an essential part of our everyday life and living without it is for many like a hardship.

Do you have a relative or friend who is left without the joy of having a real credit card right for the holiday shopping season? If you know the advantages and benefits of having a credit card, you can imagine a person's frustration if he or she cannot have them. It's you, however, who can change things.

So, if you have a person you care about who cannot qualify for a low interest or rewards credit card application, you can help him or her in three ways - co-sign for his credit, give him/her the necessary amount to fund a secured credit card or present a gift credit card.

Let's see how each of the three ways can help your friend and what effect it can have on your own credit rating.

Imagine that out of a good will and strong determination to help your friend, you venture to co-sing him/her. Not that he or she has a bad credit but you want to help them qualify for a better offer, like lower interest or no annual fee card. No doubt, such credit cards are a most desirable Christmas gift.

But, taking such a generous step, you should know, if that person gets into credit card trouble and make a credit card debt, it will inevitable affect your credit history, leading to a credit score drop.

If you do not like the idea of endangering your credit rating, you can offer the person to apply for secured credit card but to fund it out of your own purse. Considering that a secured credit card works like an ordinary plastic, the fact that the person does not have to make a deposit with his or her own funds makes it a very valuable Christmas gift, doesn't it?

What's more, a secured credit card is an effective tool to improve one's damaged credit rating and increase credit score.

A most rare case is when your relative or friend does not qualify even for secured plastic card. It is very hard to imagine what degree of distrust from a credit company one may have but if it does happen, think of giving him/her a gift credit card this Christmas.

Of course, though working like a most traditional plastic, a gift credit card does not have a credit limit but requires a certain dollar amount on it that limits your spending. Remember that you have to collect certain number of rewards points to receive a gift card and only then you can give it to your friend or relative.

Now you can have almost all the privileges of a credit card, such as making online purchases, paying for hotel rooms or car rentals.

And all this becomes possible with your help! If your relative or friend is desperate about the inability to enjoy the advantages of a credit card during the holiday shopping season - give them this ability and make their holiday unforgettable!

Doug Nicholas

Doug Nicholas, a financial consultant by profession with a Masters degree in International Business from Brown University, is also an ardent writer. Though he has a full time job at one of the companies listed on Wall Street, he does manage to squeeze in time to follow his passion. He puts his ideas to words in his articles related to finance and business.