Are secured cards the solution for people with bad credit
Individuals who have had a bad time financially would have seen their credit scores hit rock bottom. For such individuals who wish to improve their rating, secured cards seem like a good option. But do they really work for those with bad credit? Card companies have secured credit cards in order to assist someone to build good credit history and undo the damage. Borrowers may find it difficult to find lines of credit which could help their situation, but secured cards offer the credit line which could be used to rectify one`s financial situation.
Some of the banks that offer secured credit cards are Wells Fargo, Bank of America, Capital One etc, but there are many other players as well. There are other financial institutions also that help in rebuilding credit. However, there has been some indication that a few institutions have moved away from secured cards, there are still a number of reputed institutions such as credit unions which come to the rescue by offering these cards and assisting individuals to rebuild their credit history.
All types of secured credit cards would certainly require some collateral in the form of assets or cash. The collateral that is provided by the borrower acts as a security in case of non-payment and this way the bank is safe. But still the money that is deposited is not utilized by these banks like funds from a debit card. But the money would certainly be utilized in case of non-payment by the card holder.
However, analysts suggest that those seeking to repair the damage due to bad credit should be certain that they are in a position to make charges on the cards but should be doubly sure that they are able to pay off the balance each month and not carry any balance forward, as these cards are not designed to carry forward balances. In order to maintain these cardholders have to maintain discipline and make purchases that are not only affordable but be prompt in their payments each month and avail the maximum benefits from the secured credit card.
However, just obtaining a secured credit card will not solve the problem unless and until a sincere effort is made by the borrower to make amends and there is no guarantee unless one is smart with the use of the card. Simple financial planning, saving, proper budgeting, and timely repayment schedules would be required (by the borrower) to see the benefits of the card and use it to its potential.
Latest Bad Credit Card News
If you have less than a perfect credit, a limited credit history, or recent derogatory marks on your credit report, you may have trouble applying for many of the credit card options currently available on the market. But there is another way to prove that you can handle credit responsibly: a secured credit card. Since […]
On the threshold of the most romantic holiday, WalletHub published the results of the so-called Valentine’s Day Spending Survey. 1,000 men and women from across the U.S. participated in the poll. The questions concerned not only the expenses and expectations before February 14, but also how the financial situation may affect a relationship. The most […]
The numbers of co-branded credit cards have grown again. It seems that any more or less large company now strives to launch its own credit or at least debit card. Just remember the Apple Card. This time it’s Verizon’s turn. Starting today, June 26, its new Verizon Visa Card is officially released and available for […]
As a new online Bankrate survey of almost 2,5 thousand respondents shows, 84% of Americans face financial product denials. The bigger part of millennials (22-36 years old), namely 58%, was rejected for a credit card or another credit product at least once. The reason is their bad credit score.
People are seriously worried about the security of their bank accounts due to the suspicious e-mails they received this Monday. The notifications’ sender was marked as Synchrony Bank. Some of the e-mails contained information about a newly opened Amazon Credit Builder account. Others informed the customers that some transactions are proceeding between Synchrony Bank and Credit Builder accounts, and that a trial deposit had been made.
