Secured Credit Cards
62What are secured credit cards
To make it simple, you give a bank or some institution money, say $300, and they give you a credit card with $300 free for you to charge (i.e. you can spend $300 using that card - minus the fees).
If you want a no credit history credit card, poor credit rating credit card - secured credit cards are a way to go. You will not be denied because there is zero risk for the card issuer - all your expenses are covered by your deposit.
Good points about secured cards
- You will not be turned down, even with very poor credit rating
- Your regular payments will be reported to credit bureaus and your credit rating will rise
- You have a zero chance of getting in debt - all your expenses are secured by your deposit (bank will charge your deposit if you don't pay for your credit card expenses for some time)
- In fact, many people are much more spending aware when they have a secured credit card
Bad points about secured credit cards
- Well, obviously, you have to be able to give the credit card issuer a deposit
- Using your secured card you can spend only as much as you deposit (sometimes a bit less) - this could actually be a good point!
- Some secured cards force you to take some insurance policies along with your card and spend your money on that - just avoid those credit cards and you will be fine
Summary
People searching for a no credit history credit card or an easy to get credit card - even with poor credit rating are choosing secured credit cards all the time. Being risk free (all your expenses are covered by your deposit) and being able to improve your credit rating makes it a very good choice for many. Possible uses for secured cards are really numerous, e.g. some may just want to have a credit card for general use, some may want to improve their credit rating, some may want to have peace of mind these credit cards offer etc. It's all up to you to come up with a way secured credit cards might benefit you! So many of those cards are on the market today and I wish you all the luck with your card!
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Comments
I did use it for another reason and it's used for many different reasons.
Jerome says:
2 years ago
I think most people utilize secured credit card services as a means to build or rebuild their credit score. I am not sure whether there would be someone who would get this for any other reason.