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How To Find The Best Secured Credit Card?

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How To Find The Best Secured Credit Card?

Secured Credit Card

In today’s society, having a credit card isn’t just a luxury, it’s a necessity! Not only do credit cards allow consumers to finance large purchases over time, but they also provide security during an emergency and they are often used as security deposits when booking a hotel reservation or renting a car. Yet, for individuals who have a poor credit score, it can be extremely difficult to get a card; and, without a card, it is nearly impossible to begin to rebuild a good cvv shop. It can become a very frustrating Catch-22.

One answer to this dilemma is to apply for a secured card. Secured credit cards are offered by many banks, and are basically a line of personal credit that is guaranteed by your minimum savings deposit with the issuer’s bank. For example, the card issuer might require you to deposit $300, then give you access to a $300 (or, in some cases, more) line of credit. To many consumers, this is a more attractive option than choosing the other types of cards that are designed for people with fair to bad credit; they often charge exorbitant interest and fees.

Of course, to get a secured credit card, you must have on hand, or save up the amount of money that the card issuer requires for the deposit. You will not lose this money, unless you default on your card payments, in which case the issuing bank will use your bank deposit to pay off your outstanding debt with them. However, you will not be able to access your deposit without closing out the account. Even then, the issuer will typically take the remaining amount of money owed on the card out of your account, and refund you the rest.

That said, secured credit cards can be a great way to start rebuilding, or establishing, a great credit record. The issuing bank will report your payments to the three credit bureaus, and on-time payments will quickly raise your credit score!

Finding the best-secured credit card to rebuild credit, while providing all the features that you are looking for, can be a difficult task. It’s a good idea to shop around for the best deal, as the conditions of cards can vary greatly. You can also inquire as to whether it will be possible to switch your account over from a secured card to a traditional account, after an agreed-upon number of on-time payments. There are numerous websites that compare the features of cards issued by different banks, and this is a good place to begin your research. When you are looking for a new card, it’s important to consider the following points:

* What is the APR (annual percentage rate) for the card?

* Are there any annual or monthly fees, and if so how much?

* Does the card have the features that I am looking for?

* Is it possible to change my payment date if needed?

* Does the issuing bank offer a chance to switch your account over to a traditional (non-secured) account later?

Although it can be difficult to repair injured credit, it is not impossible, and secured cards are on tool that can help you work towards your financial goals.

Secured credit cards work in the same manner as a checking account debit card, however, there is no actual checking or savings account associated with the card. You make a deposit to the company that issues the secured credit card, and that becomes your spending limit. When you have made purchases that reach the amount of money you deposited, you have to deposit more money in order to continue using the card.

Advantages of using a secured credit card, other than the obvious advantage of not spending more money than you actually have, include the fact that almost anyone is eligible to obtain a secured credit card. Regardless of your personal financial history and credit score, you can make a deposit with a secured card distributor and obtain a credit card. The only actual requirement to be approved for a secured card is you must be of legal age and have money to deposit on the card.

Other advantages of a secured credit card versus a traditional credit card are that you are not charged an annual percentage rate on the amount that you deposit, and you can have your paycheck deposited directly onto a secured credit card in many instances. A traditional credit card will smother you with interest rates, late fees, and finance charges over time, and you’ll end up paying two to three times what you’ve actually charged to the card! With a secured card, you know exactly how much you’re paying for an item. Secured cards allow you to make purchases online when you would not be able to if you didn’t have a traditional credit card.

The main disadvantage to using a secured credit card in place of a traditional credit card is the fact that you have to have the money in advance for any purchase you want to make. While this is an advantage when considering your credit score and the perfect way to avoid getting into debt too deep for you to handle, it is also a disadvantage in the event of an emergency situation. If your car breaks or your home’s furnace dies and you don’t have the cash available, a traditional credit card would come in handy. Perhaps without ever using traditional credit cards, however, you will be able to save enough money to cover emergency instances and not need to rely on credit to bail yourself out of the emergency situation.

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