Note: All Orchard Bank credit cards are now issued by Capital One.
The lowest secured credit card rates available today are offered by Orchard Bank and Capital One. Orchard Bank has the absolute lowest APR or Annual Percentage Rate, charging only 7.99% for both balance transfers and charges.
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When selecting a low interest secured credit card, beware of other charges that accompany these cards. You are not only responsible for the APR for balance transfers and charges, but also the higher rates and fees. For example, while Orchard Bank offers a low 7.99% APR, it does not apply to Cash Advances or penalties.
Cash advances have a much higher APR of 20.90% and the late fee penalty can soar to 29.99%. This is because secured credit cards are really designed to help you establish or re-build your credit. Utilizing the cash advance option is often viewed as irresponsible.
Late penalties are also applied when you fail to honor your financial obligations as a way to remind you of how easily debt can accumulate.
The Capital One Guaranteed Secured MasterCard has a higher APR of 14.99% for purchases and balance transfers, but the APR for cash advances is only 19.8%, over 1% lower than Orchard Bank. Capital One also provides more benefits, which is why their APR is higher. Roadside assistance, travel benefits, and fraud protection are all included.
Picking Secured Credit Cards for Students
Secured credit cards take some of the stress off parents who are looking for credit cards for their children because they function just like unsecured credit cards, but keep purchases in control by only allowing the user to spend what they deposit. This deters overspending and encourages responsible behavior.
According to the Federal Reserve, the credit card companies can no longer pursue their top demographic, students and young adults. The new rules protect people between the ages of 18-21; the credit card companies prime target.
In the past, young people, especially those entering college were given credit card offers with extremely high credit limits. Because they were in school, it was very difficult for the majority of these new cardholders to make their payments, thus, defaulting and ruining their credit very early on.
This downward spiral caused the lawmakers to make adjustments. Currently, college-bound students and anyone under age 21 must not only provide proof of employment, they must also show their income is sufficient to make at least the minimum payment. Otherwise, a co-signer is required.
Secured Credit Cards for Building or Repairing Credit
Using secured credit cards for rebuilding or repairing credit is a smart move because many report to the three credit bureaus. Both Capital One and Orchard Bank secured credit cards are excellent choices. Each send updates to TransUnion, Equifax, and Experian on a consistent basis. This helps build your non-existent or very limited credit history.
Repairing damaged credit may take longer, because of the negative impacts. However, over time your credit score can begin to improve as long as you honor your financial commitment and pay on time each month. Every positive report from your secured credit card company adds positively to your credit history, which increases your overall credit score.
If your credit history remains positive and strong, you will begin to receive offers for unsecured credit cards. Don’t fall for a low introductory rate that will skyrocket after the expiration date. Be careful with these offers and review them very carefully, especially the terms and conditions and any disclosure statements. Failure to do so can have many negative implications.
Secured Credit Cards – How Long to Keep Them
Secured credit cards can be utilized as long as they are useful and perform a certain function. Many cancel their secured credit card accounts as soon as they receive their first offer for an unsecured credit card. This can be a costly mistake.
While secured credit cards do not have the extremely high limits most unsecured credit cards have, they can keep you in control and avoid over extending.
Your secured credit card may also be the strongest part of your credit history since it may be aged over a few years. This means if you cancel the account, your credit history may suffer, lowering your score. You can retain your secured credit card for years, making minimum purchases and paying the balance in full each month. This will keep the account active.
The lowest secured credit cards are an excellent choice because they help you in many ways and are some of the most beneficial credit cards on the market today. Take the time you need to research which secured credit card fits your needs and apply. In a short time, you will be on the way to financial freedom and independence.
The FREE credit card chaser will find low secured credit cards rates easily and quickly; use it now!
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