Digital News Report – Secured credit card may be used to help establish a new credit history or for those that have a very bad credit score. What is different with a secured credit card is that you put a cash deposit up for the money that you spend on the card. It would be typical to put up around a $500 deposit for you to get a $500 balance credit card offer. Some secured credit cards will not up your credit limit without putting a larger deposit down, while other secured credit card companies will up your credit limit without any more deposit because you earned it by paying your bills on time.
Shopping around for the best secured credit card offer is important because there are different fees associated with them. You can save a considerable amount of money by reading the fine print and knowing how much they will charge for the annual fee or if they have an application fee. You should be able to find several offers that don’t charge an initial application fee, but you will find that most of these secured credit cards will have an annual credit card fee after the first year. Make sure that you are aware of all the fees, because sometimes the fees can add up quickly on a secured credit card and leave you without any money to spend. Be leery of fees such as insurance charges each month as this can deplete your deposit quickly sometimes.
Not all secured credit cards are available to everyone. Some credit card companies will only offer secured credit cards for those that are establishing a credit history for the first time, while others will specialize in those that have very bad credit history. Not all credit card companies offer secured cards so you might have to check around for a while to find the right one for you.
If your goal is to build your credit rating again with the secured credit card, ask the company that you are considering to sign up with if they report their credit card as a “secured card” on the credit reports. Also find out if the secured credit card company doesn’t report to the credit reporting agencies. These things can hinder your goal of improving your credit report.
The secured credit card should be paid off in full every month, and you should try to make purchases on it every month to show that you are responsible at paying off the debt each month. If you are on time with your payments you might be able to get a regular unsecured credit in about a year of rebuilding or establishing your credit history.
By: Victoria Brown