Secured Credit Card: How To Use It Right
Sometimes people with bad credit history are at a dead end and are looking for a way out. There are several options for people in a quandary. There are different types of credit cards. Here we want to show you the most common.
A secured credit card may be the best option for people who want to build or rebuild a credit history. This type of cards is good for those who are improving their credit. If you are approved, you will need to pay a security deposit to receive your card. The secured credit card deposit is usually around $200 and it will give you an equal line of credit. You also will be able to increase the limit by paying in time.
On the one hand, there are fees including startup fees, monthly fees and/or activation fees; high APRs and it is best not to carry a balance from month to month on a secured card because of the high interest rates. But on the other hand, the limited or damaged credit histories are not obstacles to get them, so they will help you improve your credit score and rebuild your credit history.
You can consider secured credit cards as training, a way to add stability to your credit habits, while at the same time proving that you are responsible and striving for financial independence.
Below are simple ways a secured card can help you repair your credit.
When you are rebuilding your credit score, you can’t afford late payments. Since the most important point is exactly a payment history, which has influence on your credit score and makes 35% of your FICO score.
- It would be better if you make multiple payments, while you are using your card. The large balances can increase your debt to limit ratio, and that can put a small dent in your credit score. You might as well show good reputation, since the lender reporting to the credit bureaus is unpredictable.
- Using a credit card for multiple smaller purchases can help you pay off at the end of the month. The lower your balance, the better. If you charge no more than 30% of your credit limit, you will be able to keep your balance at a reasonable level.
- You should minimize any other applications for credit and keep your secured credit card as your primary credit card for a half of year to a year before applying for an unsecured credit card, as for the credit card issuers is important how many credit applications you make. The three credit bureaus—Equifax, Experian and TransUnion will be reported your monthly payments.
- It is very important to read the terms and conditions of the offer you apply for and contact the issuing bank if you have any specific questions.
To improve your credit history and end up with debts choose your secured credit card properly. Pay attention to the minimum/maximum security deposit, interest rate, reporting to the major credit bureaus, credit card issuer.
Below you can see the best secured cards at the current moment:
1) OpenSky® Secured Visa® Credit Card – The credit check is not necessary to apply for this card. OpenSky believes in giving an opportunity to everyone. The refundable deposit cardholders provide becomes their line of credit on the Visa card. They can choose it themselves, from as low as $200 and up to $3,000*. They will be able to build credit quickly. OpenSky reports to all 3 major credit bureaus. 99% of OpenSky customers who started without a credit score earned a credit score record with the credit bureaus in as little as 6 months.
2) – Credit lines of the card are available from $200 to $5,000. The card has super low fixed 9.99% interest rate on purchases – with no penalty rate. There are no minimum credit score requirements. There are also no processing or application fees. The issuer promises to help strengthen your credit with responsible card using.
3) Applied Bank® Secured Visa® Gold Preferred® Credit Card – The card requires no credit check or minimum credit score. The bank reports credit activity to all three National Credit Bureaus. The card has 9.99% low fixed APR and customer’s rate won´t go up even if they are late.
You will be eligible for credit cards with lower fees, low APRs, and higher limits, when your credit is on the mend after using one of these cards responsibly even for a time. The deposit you make on your secured credit card is fully refundable. So, you do not have to worry about that. The deposit helps you to get the bank approval and start the credit history improving.
We hope, the information will be useful for you and you can rebuild your credit history with secured credit cards.
Latest Secured Credit Cards Guides
If you need to build credit, a credit card is a sure method. But sometimes it’s hard to get a credit card having not so good credit score. That’s where secured credit cards come to the rescue.
Secured credit cards are very similar to general unsecured credit cards, except for one thing.
If you’ve ever wondered what exactly a “secured” credit card is, or why they’ve become so popular recently, read on to find out how this type of credit card is helping people establish and repair their credit.
Continue »If your credit is less than perfect, you might be wondering how you can ever get it back to where it used to be – or even better than it’s ever been before. A great credit score is helpful in all kinds of situations, including buying a home, a car, getting a business loan, renting an apartment, and even getting a job.
Continue »It used to be that many people hadn’t heard of secured credit cards. If you said the words “credit card,” folks assumed you were talking about a regular, unsecured credit card, and didn’t even know there was another kind. However, these days secured cards are making a huge splash, and more and more people are signing up for them.
Continue »There are a few reasons why someone might not have any credit history. Young people who have recently graduated from college often don’t have a credit card yet, because they’re just starting out. Recent immigrants to the US also arrive without a credit history. And then there are people who have simply never had a credit card, for one reason or another.
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