Secured Credit Cards FAQS

There are unsecured and secured credit cards. These cards are secured with a deposit loaded on a card account. If you are a responsible cardholder you will get your deposit back when you cancel your card. Secured card is a great option to start building or reestablish your credit as it is reported to the major credit bureaus. Applying for secured cards you are most likely to be approved. Keep in mind that these cards compared to unsecured ones do come with higher interest rates. Cash advances made via secured cards are always high.

You might have heard about secured credit cards, but if you haven`t heard about it, don`t panic. This is an option that is given by a limited number of banks across the country. The trend seems to be shifting away from this option, mainly because financial institutions don`t consider it to be a particularly lucrative option anymore. So then, before delving into why you need one, it makes sense to know what it is all about. The secured card option is for those individuals that want to get credit cards but are unable to do so due to a recent credit record. Hence, for the creditors to provide any card there is a need to collect some sort of collateral from the individual. The credit card...

Your security deposit is intended for surety of your obligations related to your credit card account, it is a guarantee of repayment of your credit. In most cases security deposit equals or determines your credit limit. Typical secured credit card agreement does not allow cardholders to make withdrawals from secured deposit funds for any purpose. It is possible only if agreement is terminated or your credit limit is reduced. In that case the remaining amount should be sufficient to ensure your credit card obligations are met.

If you wish to increase credit limit of your secured credit card, you should contact your issuing bank, and find out what the best way to do it is. They may offer you to increase your security deposit and then your credit limit will be increase proportionally. Some banks may qualify you for a higher credit limit with no further security deposit required. Make sure you know associated fees, if any.

Secured credit cards are great for people with bad or no credit who are trying to build or rebuild credit history. Lenders are more likely to approve a customer with limited credit for a secured card than for a traditional one, as the cash deposit provided by the cardholder guarantees that the bank will be repaid in any case. If a customer handles his credit card responsibly, and issuing company regularly reports account activity to credit bureaus, secured credit cards may help cardholders build or rebuild their credit. View selection of secured credit cards on our web site.