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What Is A Secured Credit Card?
Many people may be asking themselves what exactly is a secured credit card?
Well secured credit cards are an incredibly popular variety of credit cards. And secured charge cards, as their title implies, are secured or guranteed. Well actually they are secured for the credit card service provider. Secured charge cards ask you to open up a bank account with the credit-based card provider and keep some money in that bank account. This particular bank account provides a safeguard for the provider of the secured credit card. The borrowing limit will depend on on the sum of money you possess within the bank account which you have begun with the provider of the charge card. This is often typically between fifty to one hundred percent of your bank balance. Therefore in that respect, guaranteed credit cards aren't actually credit cards - given that they do not provide you with any kind of consumer credit. Because of this rationale, the secured charge cards are now and again also known as debit cards.
Secured Credit Card Highly Recommended
So then why is the idea of secured credit cards highly recommended?
It is most likely no surprise to anyone that personal credit card debt is a huge problem that is brought on by poor usage of charge cards. These kinds of individuals wind up ruining their own credit standing to a degree in which they can't obtain an additional credit card - that is one that is unsecured. Even though they've already repaid their fees and eliminated their credit card debt, their credit history will continue to stay with these individuals. For those individuals a guaranteed secured bank card is a blessing. Guaranteed credit cards provide these people a chance to not just obtain a charge card to begin with but in addition also enhance their own credit score using the secured bank card within a self-disciplined approach by paying their fees on time and regulating their spending. When they proceed with these beneficial practices, their credit score progressively increases over a duration of time. Consequently secured charge cards give people the means of correcting their credit score.
Who Should Get A Secured Credit Card
It is not merely individuals with a poor credit score who opt for
secured charge cards. A number of people choose guaranteed credit cards
simply because they do not wish to be troubled with the payments of a
credit card. These people do not want to even fill out an application
for an unsecured credit card. You can also find a few individuals who
simply do not want to borrow funds, nevertheless, these kinds of
individuals are unusual.
Many individuals simply choose secured bank cards since they have often heard terrible experiences of personal credit card debt, possibly an individual from their family members or one of their buddies had been ruined by unsecured debt and so they do not wish to make the same error. To make sure they do not, they opt to get a secured credit card.
No matter what the reason people have for getting a secured credit card, they do seem to be very popular.