Secured Credit Cards
Secured credit cards are great for people who have bad credit or who don't want to use actual credit that they can't afford to repay. In most cases, the only people that choose secured cards are those who have no other options, but they are available to anyone. Secured credit cards usually work in one of two ways. They either require you to deposit money into the account (up to a certain amount), and then you can use that to determine your credit limit. Either that, or they require an annual fee and/or some type of collateral that ensures creditors that you will repay or they will have recourse against you.
Secured credit cards are tricky, because they aren't always cut-and-dry like regular credit cards.
Key tips for when you want to get a secured credit card:
- Some secured cards are only for specific websites or businesses. It might seem like you're getting a general use card, but you end up with a card that will only buy you $500 in kitchen gadgets and appliances, which you probably don't need.
- Secured cards tend to be a bit sneakier because they are in the business of helping desperate people. Try to make sure that you read the terms and conditions and know what you are getting so you don't get taken for a ride.
- Watch out for annual fees, service charges, and other expenses. Some secured cards will nickel and dime you until your credit limit is almost maxed out just from the fees you are paying. This is not worth your time or money.
- If you have no other options and need to rebuild your credit, you can find useful secured credit cards. Just make sure that you take the time to do your homework and avoid cards that are just out to get you and look for cards that actually offer support for people who are struggling with credit.
Advice on finding the best secured credit cards:
To choose the best secured credit cards, you need to check out the terms and conditions, interest rates, perks or rewards (if any), and what it takes to get the account opened. Compare your options to make sure that you find the card that suits your needs and gives you an affordable option for rebuilding your credit. Everyone has different needs but secured credit cards definitely offer something for all kinds of situations. You just have to be careful and check out what you're getting very carefully before you agree to anything.
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