What Is a Secured Credit Card?

Secured credit cards are designed for those of us with less than perfect credit who want to make an improvement in our credit history. ItЎЇs called secured because you make a deposit in a savings account that is attached to your credit card. If you default on the payments the savings account is used to pay the bill.

It is much easier to obtain a secured card than it is to get an unsecured card. Even if your credit history is poor or non existent because the card is secured it is relatively easy to get.

Your credit limit is generally the same amount as the deposit you have for security. This stays on account until you decide to close the card or you graduate to and unsecured card.

Excellent for credit building

Because secured cards are relatively easy to get they make an excellent tool for improving your credit history. People with poor credit or no credit at all can get a secured card. The issuers of these cards report your credit habits to the credit reporting bureaus after 8-12 months of prompt payments you can generally graduate to unsecured credit cards. Use your secured credit card just like any other major credit card and you'll build your credit.