What You Should Ask About Before You Get a Secured Credit
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
doní»t report it does you no good.