Bad credit secured credit cards are not as hard to come by, as you would think. In fact, you can get one from a variety of credit card issuers, including from many banks and credit unions. Getting the best one is a simple matter of collecting a variety of secured credit card offers and comparing them.
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A large number of credit card issuers will happily offer secured credit cards to those with bad credit, because the risk normally associated with those having bad credit is taken away with such cards. The fact that the cardholder has to secure the credit card with a deposit equal to the credit limit on the card is the insurance any credit card issuer needs.
What to Look for in Secured Credit Cards
If you are in the market for a secured credit card, there are certain things you must look for. Essentially secured credit cards give consumers an easy way to rebuild their credit that has been damaged by bankruptcy, foreclosure, or due to your credit management. Choosing the right one can make all the difference.
It is essential to choose a secured credit card, which reports your transactions monthly to at least one of the major credit bureaus Experian, Equifax, or TransUnion. This is probably the most important thing to check out because realistically, you want to able to rebuild your credit as soon as possible.
If your secured credit card is not reporting to the major credit bureaus, you are wasting your efforts in rebuilding your credit.
Seek out a credit card with reasonable fees. The credit card company wants to earn money on your credit card; therefore, there will be fees and charges. There may be application fees and other unexpected fees. There will definitely be an annual fee, over the limit fees and many more; you need to be aware of the cost before you choose the card for you.
Compare how much interest your security deposit on your credit card will actually earn with a secured credit card you are considering. There may be wide differences from one company to another. Be sure to find out how long it will take you to be eligible for an unsecured credit card. If the company typically takes more than a year to upgrade clients with a good payment history, you may want to keep shopping around.
Be sure that you are choosing a secured credit card that is offered by a trustworthy company, not one that is looking to take advantage of those who need help. Some cardholders require you to make other purchases in order to get a secured credit card. If you receive such an offer, keep looking for a better one with no strings attached. You can check out how companies treat customers by visiting the Better Business Bureau.
Secured Credit Cards versus Bad Credit Credit Cards
While you may hesitate to tie up your own money in a secured credit card account, there are some advantages to having a secured credit card over a bad credit credit card. One of the biggest ones is the fact that you can get a larger limit to work with. Because you are providing the funds to secure the card, you can obtain a limit that works for you. Bad credit credit cards typically offer very low credit limits.
Many secured credit cards actually have better rates and fees than the majority of bad credit rating credit cards. This is because the risk they assume is lower. If you have bad credit, compare both secured and bad credit rating credit cards before making your choice.
Make the Most Progress Rebuilding Your Credit Score
If you are taking out a secured credit card to establish or reestablish good credit, you will want to be very specific in your actions. Be sure to use your credit card for multiple purchases each month.
After receiving a bill, be sure to pay it in full for the best results possible with your credit score.
You should also strive to keep your used credit under 30% of the available credit on your credit card. Ratio of available credit to used credit is also important information for building credit scores. By following such guidelines, the improvement to your credit score will be pleasantly quick.
If you are ready to start rebuilding your credit use the FREE credit card finder to track down the right credit card offers for you!