An Internet search via a major search engine like Google or Yahoo can give you a good starting list of companies that offer credit cards that are secured. Use the search term secured credit card and you should see a mixed group of results including news about secured credit cards, individual banks that issue credit cards that are secured, and websites that allow you to compare secured credit cards.
The easiest way to find a good secured credit card company is to use the FREE credit card chaser, which will quickly find the card you need!
Credit card comparison sites that offer a multitude of cards are a great resource to find secured credit cards. They often allow you to compare the benefits, features, and terms of a card side-by-side, so that you can make an informed decision. You will want to look at as many choices as you can as carefully as you can, because there are wide ranges of benefits and fees.
What is the difference between a secured credit card and a prepaid credit card?
A credit card that is secured, like a prepaid credit card, requires you to put cash up front to cover your expenses. In other words, your credit line is however much money you invested into the card. Both types of cards can also be used in most places that normal bank credit cards can be used, but that’s where the similarities end.
The biggest difference between a secured credit card and a prepaid credit card is that you actually have to apply for a secured credit card, just like a regular credit card, so there is no anonymity. It can also go on your credit report, which can help you to build enough credit to eventually qualify for a regular credit card. To check your credit report, you can go to a credit bureau like Experian.
You could get a secured credit card from a bank, credit union, or other lending institution in person, through the mail or through an online application. To get a prepaid credit card, you often only need to go to the local store and take one off a rack. Secured cards also take a while to activate, while a prepaid card is active as soon as you leave the cash register.
A secured credit card tends to require a bigger deposit than a prepaid credit card. Often a secured credit card will require $200 or more, while prepaid cards can be as low as $25. A secured card will usually pay interest on the money you have in their account, almost like a savings account.
While only some prepaid cards are reloadable, all secured cards are designed to be reused by simply replenishing your account. A secured credit card may also offer to extend your credit limit beyond what you have secured, assuming that you have a history of paying on time.
The average amount of time is about one year. If you pay on time, the issuer of the secured credit card will want to keep you as a customer and offer you a regular bank credit card quickly. If the credit card company reports to the major credit bureaus, then you may also get offers in the mail from other companies for unsecured credit cards as your credit history grows.
What fees does a secured credit card charge?
First off, all secured cards charge an annual fee, and they can range from a few dollars up to $50. They also often charge an application fee up front. As with all credit cards, there will likely be fees for late payments or failing to make the minimum payment.
The cards to avoid are the ones that charge monthly insurance fees, transaction fees, inactivity fees and other fees designed to nickel and dime you while you have the card. The Federal Trade Commission also warns to be wary of cards that list a 900 number to call for information. There are often very high fees associated with the call.
It is very possible to find a secured credit card that offers no application fee, no extra fees, and a low annual fee, so there’s no need to settle for a bad agreement.
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