Five Things You Need To Know Before Getting A Secured Credit Card
Over the years, credit cards have become a fact of life. These days, you cannot make a plane reservation, purchase stuff, and more importantly, build your credit rating without these little rectangular plastics.
But the thing is that not all people can qualify for credit cards. People with poor credit ratings typically find it difficult to apply for credit cards. This is because not many creditors are keen to extend credit to people who have a bad credit history.
If you are one of those people who find it hard to apply for regular credit cards, then you are wise to consider secured credit cards. Unlike regular plastics, secured credit cards are specifically for people with poor credit. This is because secured credit cards are a great financial tool for re-establishing credit. But before you apply for secured credit cards, here are the top five things you need to know about them:
1. What exactly are secured credit cards?
Secured credit cards are credit cards that require a deposit from the cardholder. More often than not, a cardholder is required to deposit between 100% and 200% of the credit line. This means that if you want to have a credit line of $500, you must deposit somewhere between $500 and $1000 to your secured credit card account. 2. Where can you obtain secured credit cards?
Credit unions typically offer secured credit cards. If you are not a member of any credit union, you may visit BankRate.com to check the list of other secured credit card issuers in the country. You may also inquire with local banks if they offer secured credit cards. 3. What charges or fees should you expect?
The fees vary among secured credit cards. As such, it is a good idea to compare several secured credit cards to know which ones offer the best deals. Do not go for cards that have application fees. Likewise, find secured credit cards that have low annual fees. Before applying for a secured credit card, make sure you read and understand the terms and agreements first so you will not overlook any fee. 4. How much money should you deposit?
The amount usually varies from card to card. However, most secured credit cards accept deposits that range from $300 to $500. 5. What problems should you watch out for?
Not all secured credit card issuers are the same. There are unscrupulous creditors who extort cardholders because of their bad credit history. There are also those who will only agree to give you secured credit cards if you buy an insurance policy that you have to pay every month. With that said, you should be very careful when applying for secured credit cards.
Credit Cards
|