Secured Credit Card Guide for Consumers

Secured credit cards are perfect for people who want to establish credit or rebuild damaged credit history. What benefits can you get by using a secured credit card? How can choose the right secured card for you? And how can you use it build or rebuild credit? Let’s answer these questions one at time.

What is a Secured Credit Card?

To open a secured credit card account, the applicant must make a deposit in his/her savings account. This serves as a guarantee that in case of default, the credit card issuer can use the cash deposited to pay the unpaid charges. Hence, the value of your security deposit will also determine the amount of credit limit you can enjoy.

Some issuers will match the value of your deposit while other issuers may give a slightly lower or higher credit limit than the value of the security deposit. However, unlike prepaid debit cards, a secured cardholder can be charged with interest rates each time the outstanding balance is not paid in full.

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Resource/s: prepaid cell phone services