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. Ití»s 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.