Secured credit cards are made specifically for people that have zero or bad credit due to whatever circumstances. It’s not a good idea to have poor credit simply because it can limit your opportunities in life, and a secured credit card can help you fix that. Any other credit card can also help repair poor credit, but you may not be eligible for them immediately. A secured credit card is a great way to get the ball rolling.
Who Needs A Secured Credit Card?
The ideal people to use a secured credit card are people with no credit or very bad credit. Students, people that have pulled out of a financial slump, recently unemployed people, and a variety of others might want to get a credit card, but be unable to because of their credit records or lack of one. To that end, you should evaluate your needs and records to see what you can get.
You also need some sort of credit card to reserve hotel rooms, plane tickets, and a great many things in relation to traveling. Some can even be used as identification, though some service providers will not accept it as a valid state-issued ID. It’s far better to use a card with a standard ID as a way to prevent identity theft. In regards to building credit, should your card ever be stolen or lost you should report it as such immediately to ensure you do not get wrongly charged for services you did not actually buy.
Secured credit cards often carry a very low credit limit, and they require a deposit. However, the range can vary from a few hundred to several thousand dollars. This deposit usually determines your starting credit limit, with some companies augmenting it somewhat based on a percentage. They can also lower or raise your credit limit based on how well you are maintaining your card. If you stay consistent in your payments then your spending limit will likely increase. If you slack, you may not have as high a spending limit, and you are sure to lose money in late fees.
In either case, it is important to never go over that limit. These cards should never carry a balance, as that will prove that you’re not able to limit your spending and be reliable, and likely not help your credit score at all. These cards are meant to test whether or not you can handle a regular unsecured credit card responsibly. Monitor your purchases carefully and make sure you pay your bills in full. You can even simply buy a few small things and pay off the bill, as that will help prove your reliability.
It’s important that you don’t keep one of these cards for long, because they carry high APR and interest rates that can burn more money than you might want to. You should treat a secured card as an introductory fee that will help you save money in the long run. It depends on your bank as to how long it takes to qualify for an unsecured card, but for the most part it takes approximately a year. Even after you qualify yourself, you should never slack with your credit payments, otherwise your credit score will suffer and you may even lose your hard-earned unsecured card.
Precautions To Take When Choosing A Secured Credit Card
There are some companies out there that may try to take advantage of you. They promise a guaranteed credit card, with no strings attached, but they may charge you a number of ridiculous fees for absolutely no benefit. Be aware of the terms. They will most certainly not help you or your credit score without a hefty cost.
Remember, real credit card companies that offer secured credit cards will not make you pay any fees outside of the necessities to the card’s activation, and they will tell you everything that you must pay, if you ask. The most common fees are deposits and activation fees, though these are all variable depending on the bank offering the card.
Compare Secured Credit Cards Now!
Secure credit cards are invaluable to people wanting to improve their credit scores so they are able to get improved financial assistance later in life should they need it. A good credit score opens up things like mortgages, auto loans, and other loans that can help you pursue your goals in life. Get the credit ball rolling by using the free credit card chaser above, and improve your credit score with a secured credit card today!
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