I actually have one of these. It has a $7,000.00 credit line, which gets added to my total available revolving credit. Since that is more than all the rest of my available revolving credit, it obviously helps my revolving credit used // revolving credit available ratio, which has a pretty large effect on credit score.
The devil is in the details. You can only use this credit to buy things from the issuer's catalog, and the prices some of these companies charge for stuff is ridiculous. If possible, sign up for a free trial and look at what they sell and how high the prices are. However, even if they charge too much for their merchandise, just having the credit line added to your total available revolving credit - you don't normally have to buy a lot of stuff from them - may make it worthwhile for you.
Some companies, however, do require that you make one purchase before they will report the account to the credit bureau. Try to make sure that they have at least 1 thing for sale that you would want to buy, and that you can afford whatever the down payment on it is.
They usually require down payments, and they can tend to be high, for example 60% of the purchase. If 60% is their down payment requirement, you would have to pay $60.00 up front to "charge" A $100.00 item. The remaining $40.00 would be placed on your account, using up $40.00 of your credit line. However, the exact percent required varies among the companies that do this kind of thing, and many of them lower the requirement as the account gets older. My original requirement was 60%, I only ever bought 1 thing from them, and now, about 2 years later, my required down payment is only 10%.
There are always some sort of fees. The one I have requires a $9.95 monthly fee. Some of them require both monthly and initial fees. I got one "offer" in the mail that required an initial fee of over $200.00!
Try to find out who they report to. They DO NOT necessarily report to all 3 major bureaus. I found out, after making the required initial purchase (a $45 wristwatch, $27 down payment), that the company I was dealing with only reports the account to TransUnion, probably the least useful of the 3 majors. Most car dealers, credit unions, retail stores, etc., tend to use Equifax and/or Experian, at least here in Utah.
So, YES, you will get the credit limit, and YES, they will report the account to at least one credit bureau, and YES, that will help your credit score.
On the other hand, the merchandise is likely overpriced, so you probably won't really use the account, you'll probably have to pay some kind of ongoing fee to keep it open, and you might have to pay some initial fee to open the account. You may also have to buy something before they'll start reporting, and they may not report to all 3 major bureaus.
You have to gather as much specific information as you can, and decide if what it will cost you is worth however much it will help your credit.
In my case, for example, if I had known my $9.95 monthly fee was going to get me a $7,000.00 increase in available revolving credit ONLY at TransUnion, I probably wouldn't have done it. On the other hand, once I already had the thing, with an automatic monthly payment set up, I decided to just leave it alone. It does help my score with one bureau, and $9.95 a month isn't very much money.
Starting Score: 469
