Fix Your Credit With Secured Credit Cards
Secured credit cards are used to refer to credit cards that can be issued with an individuals negative credit score. Secured credit cards provide opportunity to people (with a negative credit history) to improve their credit rating. In that sense, secured credit cards act as redeemer for such people. So, secured basically gives people the chance to start over where they are and begin to start a solid foundation of managing their credit and spending.
The way secured credit cards work is the financial institution issuing the card requires the individual to open up an account with the financial institution and maintain some cash balance in the account. Why is that required? Well, credit cards are a business for the credit card suppliers; so it is difficult to trust someone who has defaulted on his/her payments in the past. The bottom line is a business is about making money and such risks are a threat to profits. The bank or the financial institution will generally pay interest on the balance in your account. However, it is best to check this with the financial institution. The credit limit on the secured card is determined by how much money the applicant decides to put into the account and is generally between 50-100% of the cash balance.
There are plenty of secured credit cards available on the internet and elsewhere. When searching for them it is best suited that you consider 4 things in particular.
Minimum Balance
You will have to commit to keeping a least a minimum balance in your account. This will keep the card active.
Credit Limit
Whatever credit limit that you are given you will have to adhere to that amount. However large or small it is you will need to handle it carefully in order to see your credit scores start to increase.
Other Fees
There are other fees tacked onto a secured credit card that might otherwise not be on a regular credit card. You will need to be aware of those fees so you will stay within guidelines.
Interest Rate
The interest rate is a very important issue. It will perhaps be higher than average credit cards but this is one of the first things discussed when you apply.
If you need to improve your credit scores do not be discouraged with being forced to use a secured credit card. It is the start of a new future and you are literally starting at the bottom. If you stick with it you will regain a credible credit rating.
The way secured credit cards work is the financial institution issuing the card requires the individual to open up an account with the financial institution and maintain some cash balance in the account. Why is that required? Well, credit cards are a business for the credit card suppliers; so it is difficult to trust someone who has defaulted on his/her payments in the past. The bottom line is a business is about making money and such risks are a threat to profits. The bank or the financial institution will generally pay interest on the balance in your account. However, it is best to check this with the financial institution. The credit limit on the secured card is determined by how much money the applicant decides to put into the account and is generally between 50-100% of the cash balance.
There are plenty of secured credit cards available on the internet and elsewhere. When searching for them it is best suited that you consider 4 things in particular.
Minimum Balance
You will have to commit to keeping a least a minimum balance in your account. This will keep the card active.
Credit Limit
Whatever credit limit that you are given you will have to adhere to that amount. However large or small it is you will need to handle it carefully in order to see your credit scores start to increase.
Other Fees
There are other fees tacked onto a secured credit card that might otherwise not be on a regular credit card. You will need to be aware of those fees so you will stay within guidelines.
Interest Rate
The interest rate is a very important issue. It will perhaps be higher than average credit cards but this is one of the first things discussed when you apply.
If you need to improve your credit scores do not be discouraged with being forced to use a secured credit card. It is the start of a new future and you are literally starting at the bottom. If you stick with it you will regain a credible credit rating.
