What You Should Ask About Before You Get a Secured Credit Card

Credit card shopping is a worthy pastime. It can save you money and hassles. Many companies offer secured cards. Credit unions, large and small banks all offer secured cards. There are internet sites that offer information on secured cards as well Bankrate.com is a good location for finding information on available offers.

How much is the annual percentage rate (APR)?

This is how much you pay for the money you borrow. It is based on the balance on your card each month. If you pay the full amount monthly you can often avoid this charge.

Is there an annual fee?

Most secured cards have an annual fee. This a fee, paid yearly for the privilege of having a card. When card shopping look for the lowest annual fee, if any.

Are there application fees.?

These can be called processing fees, account set up fees, or program fees, or membership fees. These fees can be as high as $250, and will charged to your first statement. It is possible to find a secured card without fees you just have to shop carefully.

What are late and over-the-limit fees?

If you make late payments you will be charged late fees, you will also defeat the purpose of a secured card for improving your credit. These fees can be as much as $50 per time

Are there penalty rates (default rates)?

If you pay late does the card issuer increase your interest rate? Some companies will increase your monthly interest rate by as much as 10% or 15%.

Is there a grace period?

A grace period is the time between the date of purchase and when the interest begins accruing, usually 20 to 25 days. It is a great way to keep the costs down. If you carry a balance this won't help but if you pay off our bill monthly it can save you quite a bit of money.

Do they report to the credit bureau?

It's important to have the card issuer report your card activity. This is the way you rebuild your credit. If they donЎЇt report it does you no good.