Secured Credit Card

What Is a Secured Credit Card

This is a major credit card and is issued as either a Visa or a MasterCard. However unlike traditional cards where you extended a line of credit on the promise that you will make payments - this card is going to require you to first make a deposit to secure your account.

 

You will make a deposit with the card issuers bank, this is FDIC insured and an interest bearing account. It is fully refundable provided you don't default on your payments. Then you will be extended a secured mastercard with a credit limit equal to the amount of your deposit. For example, if you deposit $500 then your card with be issued with a limit of $500.

 

You are still required to make monthly payments and will be charged an interest rate. However because this line of credit is secured the amount of interest will be much lower than an unsecured offer. You should be able to find a card with an APR of around 10%.

 

Will It Help Improve My Credit?

If you use your card responsibly it can be used to help build a trail of positive payments. The account will report to all three major bureaus - double check on this we have seen a few secured cards that will not report to all three.

 

It will be reported as a 'secured' line of credit which just means it will be weighted in your score calculation a little less but is still a good tool to re-establish your credit history.

 

If you have been suffering from past financial curve balls, I'm sure you have realized by now that having a major Visa or MasterCard is essential in today society. This type of card is a great alternative to paying exhorbitant interest rates and upfront fees!

 

These are real credit cards and you can use them to make purchases on the internet and on the phone. You will also be given 24/7 online account access and your account will be protected by a liability policy. This just means that if your card is lost or stolen you wont be held responsible.

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