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Pioneer Blog

Using Subscription Services to Build Your Credit

Posted on December 10, 2019

Building your credit, especially if you have poor or no credit, is super hard. Nobody is willing to give you a loan or credit card you need to build your credit, so you are stuck. Those that do come with extremely low limits and extremely high interest rates.

But don’t worry, a low credit score isn’t a life sentence, it just requires some patience, hard work, and creativity to fix. For example, do you have a couple of subscription services you currently use, like Netflix, Hulu, Disney+, or Dollar Shave Club? You can use them to build your credit very easily and even set it up to run automatically, without needing to mess with it every month.

First Step, Get a Credit Card

hand holding a credit card looking at a laptopIf you can, get a credit card. Pioneer’s VISA credit card will do nicely, but any credit card will work. Without a credit card, this whole plan won’t work. If you have low credit, it might come with a higher interest rate or a low spending limit, but that’s fine. If you have enough money to cover the subscription services, this shouldn’t be an issue.

If you can’t get a traditional credit card, get a secured credit card from Pioneer or another financial institution. A secured credit card works by you giving a deposit up front that covers the credit limit on the card so you can’t overspend. You’ll need to regularly put more money on the card, but the bright side is that anything you buy with the card is paid off and that activity is sent to the credit bureaus, which helps your credit score grow.

Putting the Subscriptions on your Credit Card

Netflix on a TV with a steaming hot cup of cocoDo you have a credit card? Now is the time transfer over your subscription services to it. Login to your account details on your Netflix, Hulu, and whatever other subscription services you utilize and put your credit card as the primary payment method.

This works best if the subscriptions you put on the card are a consistent charge every month. This can make the automatic side of this plan much easier if the monthly costs don’t change regularly.

In an effort to save you money, only add subscription services you know you’ll keep for a long time. Don’t add first time trial subscriptions or ones you might want to cancel. By setting up an automatic process, you could easily forget about them and end up paying for services you don’t want or need.

Create a Means to Automatically Pay Off the Card

So now you have your payments going to a credit card, it’s time to figure out a method for paying it off month after month, preferably automatically. At Pioneer, we have automatic bill pay you can set up on a recurring basis to pay off all your bills, including your credit card.

It’s easy to do if your credit card bill won’t change month to month and a Pioneer credit card. Just set up a transfer in myPioneer, set the amount your bill will be each month and then schedule it to repeat every month when your bill would come due.

If the credit card isn’t with Pioneer, you can still schedule a recurring transfer every month in myPioneer through Bill Pay. Just fill out the relevant information for paying the bill, select how often you need to pay it, and a check will be sent to pay off the bill.

Make Sure Your Account Can Cover the Expenses

woman sitting outside with a smartphone and laptopWith automatic transfers set up to pay off your credit card, the last step is to make sure you have enough money in your account to pay for it. Since the payments are done automatically, there is a risk of simply forgetting about it and not budgeting for the expenses every month. If you don’t have enough money at the end of the month, you risk putting yourself into credit card debt or missing a payment, hurting your credit.

To prevent this, find a way to make sure there is enough money in your account. This could be setting up a reminder on your phone the day before to check your account balance or creating a separate savings account that then you have a portion of your income go into every paycheck. Whatever you choose to do, make sure you don’t put yourself into debt just because you don't have enough money in your account.

Watch Your Credit Score Go Up

Growing your credit is a slow process that could take years, but with this method, at least you have something always working. By using a credit card and then paying it off every month, you establish a regular positive payment history which is a major factor to growing your credit.

If you don’t have one yet, get started by applying for a Pioneer credit card. This tool is all you need to get started on growing your credit in a smart and responsible manner.

Open a Pioneer Credit Card!

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