Note: All Orchard Bank credit cards are now issued by Capital One.
If you are looking for a secured credit card, it is likely because you want to get your credit back on the right track. There are literally dozens of websites that will allow you to compare and contrast secured credit cards, but many of them list out of date information.
While JD Power also gives good information on credit cards with the highest customer satisfaction ratings, you will not be able to find a list of secured credit cards. Before you will be able to effectively compare secured credit cards, you need to know what all of your options are.
How do you apply for a secured credit card?
Most secured credit card issuers only require applicants to make the initial deposit and truthfully fill out all paperwork submitted. The FTC explains exactly how secured credit cards are issued as well as how consumers can identify unscrupulous marketers that prey upon those with poor credit ratings.
You can apply for a secured credit card in the same manner that you would submit an application for an unsecured credit card. Online applications are the most convenient, and they give consumers the option of getting the process started more quickly. The amount of money that you deposit onto your secured credit card will be equivalent to your line of credit; however, you must also take fees and interest charges into consideration.
Can you get a personal credit card after keeping your secured card in good standing?
Many credit card companies that offer secured credit cards also offer business credit cards, personal credit cards, student credit cards, and low interest lines of credit. By opening a new line of credit with a secured credit card and taking care to make all of your payments on time, you may be able to qualify for an unsecured line of credit in the near future.
Although consumers can apply and be approved for numerous secured credit cards having negative trade lines such as bankruptcies, charge-offs and foreclosures can prevent their secured credits from being graduated to unsecured lines of credit. Normally, it takes seven years for negative marks to age off of credit files, but any new negative marks that appear will continue to negatively impact credit scores.
Getting an unsecured line of credit can be problematic if your credit score is still poor. CNN Money recently reported that a credit card issuer had begun to charge consumers with low credit score 79.9% interest. Even if you are approved for an unsecured credit card, you might still end up paying a lot of money in interest and fees.
How much interest do secured credit card companies charge on average?
Secured credit cards usually come with a high interest rate because the cardholders are considered to be in a higher credit risk category. Secured credit cardholders can expect to pay around 15% to 29% interest on average. Some secured credit card companies charge a lower interest rate, but this is usually offset with higher fees. Annual fees, processing charges and even account setup fees are applicable on nearly all secured credit cards.
Rates may go down as more money is deposited. For example, a secured credit card with a $250 limit might have higher interest rates applicable than one in the amount of $1,000.
What are the best secured credit cards?
As with any other financial product, consumers usually agree that credit cards with the least amount of fees and the best interest rates are superior. Capital One has long been in the business of servicing consumers with low credit scores, but a few other companies have been getting rave reviews in recent years.
There are many different secured credit cards offered by Visa, MasterCard, Discover, and even a secured American Express through USAA Bank. Taking the time to review their setup fees, penalty charges, and interest rates will help you to determine which secured credit card will work best for your lifestyle. After you have made your selection, you can begin the application process and wait for your new secured credit card to arrive in the mail.
- Where can I compare secured credit card options?
- Dupage Credit Union Visa Credit Builder Secured Credit Card
- What are some unsecured credit card companies?
- Are there any secured credit cards for bad credit?
- Are there any credit cards that help rebuild credit?
- Are there any unsecured business credit cards?
- Polish & Slavic Federal Credit Union Visa Secured Credit Card