How To Choose Your Secured Credit Card
When shopping for the right secured card, it is very important
that you consider and compare the benefits and drawbacks for
each one. To choose the best secured credit card for you,
determine what features are most important to your financial
situation and spending style, measuring them against the costs
associated with each offer.
Factors such as application fees, annual fees, finance charges,
accrued interest on the deposit, available line of credit
and minimum savings deposit are some of the most important
Once accepted for a secured credit card, you will be required
to open a savings account that will be connected to your card.
The minimum deposit amount required will vary by the car,
mostly bewteen $300 and $500. SInce this amount determines
your credit limit, you'll need to choose one that fits your
financial style and goal.
The credit limit is the maximum total amount--for purchases,
cash advances, balance transfers, fees, and finance charges--you
may charge on your secured card. It is usually up to the amount
of your security deposit.
There are various types of fees applied for use of the card
and services associated with the secured credit card, such
as application fee, setup fee, maintenance fee, annual fee,
cash advance fee, or late-payment fee. Make sure you understand
all the fee structure and terms. For more information, visit
secured card fees
page. Since those fees are higher than regular credit cards,
you'd better shop around for a card with least fees and best
If you sometimes carry over a balance from month to month,
you may be more interested in a card that carries a lower
interest rate. The annual percentage rate (APR) is the yearly
interest rate you will pay if you carry over a balance or
take out a cash advance. Compare APR's of each secured card
you consider. Most secured credit cards charge fixed rates.
Balance Computing Method
Another important item you have examine when choosing a secured
card is the method how the finance charge is calculated. Card
issuers use one of the following methods: average daily balance,
adjusted balance, or two cycle billing. The average daily
balance method is the most widely used.
It is not recommended to get cash advances with secured cards
since APRs for cash advances are higher than for purchases.
If you must, however, pay the balance in full the next month.
Check the cash advance fees when you choose your secured credit