Credit unions often have more stringent requirements when it comes to their credit card applications. People often have to be members of that particular credit union and have a very high credit score to qualify for one of their cards. In return, the member gets a credit card with low interest rates and fewer fees than a bank-provided credit card. Credit unions like Hanscom Federal recognize that not everyone has a great credit score, but still believe these people deserve a good credit card, so they offer a secured credit card to their members.
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Since secured credit cards are designed specifically for people with low credit scores, they are a great choice for young people that have yet begun building their credit history or people that have already done damage to theirs and want to start over. For more information on how to build up a low credit score, check out the advice in SmartMoney’s “How Can I Improve My Credit Score?”.
The Way the Hanscom Federal Credit Union Visa Platinum Secured Credit Card Works
This secured form of credit card works just like any other. The cardholder is required to put down a security deposit to prevent defaulting on the account. This deposit is kept in a special account that can be a typical savings account, a money market account, and in some cases even a Certificate of Deposit.
This deposit will also decide the cardholder’s credit limit. If the cardholder wants a higher credit limit they have to deposit more money into the holding account. If the cardholder decides to cancel their secured credit card their deposit amount will be refunded, minus any balance or fees due.
Benefits of the Hanscom Federal Credit Union Visa Platinum Secured Credit Card
The reason this type of credit card will help raise a person’s credit score is because the card provider reports the activity of this account to the credit bureaus. So, if the cardholder uses the card well and shows they can handle credit responsibly, their score will improve.
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