2006-09-21 18:13:52 · 8 answers · asked by CantBClever 2 in Business & Finance ➔ Credit
"Secured" refers to a collateral of money or object with similar monetary value in kind belonging to the borrower, held by the lending party, in favour of the lending party.
The lending institutions, like banks, holds the borrowers money or above assets, and has a legal right to sell the borrowers "secured" assets or take the borrowers cash, to get money owed to them;
in the event the borrower, being the credit card holder, fails to repay the full amount, principal and interest, when demanded of them after the prescribe terms have expired.
In this case, the credit card holder may borrow from the lending institution or bank, but should the holder not be able to service the principal and interest amount owed to the lenders at the end of term, as agreed by between lender and borrower, the lender has a right to sell off assets or seize cash, perhaps of the savings account, to settle the amount of money owed.
The banks have a fiduciary duty to inform the credit card applicant of potential pit falls; if not, they are not doing their jobs and are after commissions from signing up new credit card holders. Credit companies pay the banks an agreed fee based on the volume and value of credit cards that banks are able to get customers to signed up.
2006-09-21 19:18:27 · answer #1 · answered by pax veritas 4 · 0⤊ 0⤋
It means that you have secured your credit by paying the Co. a certain amount in advance to pay off the card. You can have a card that you pay $500. for and you can spend $500 on it. There is no risk for the credit card co. It is a good way to establish your credit.
2006-09-22 01:20:24 · answer #2 · answered by notyou311 7 · 0⤊ 0⤋
A secured card requires you to open and maintain a savings account as security for your line of credit; an unsecured card does not. These offers are often scams aimed at people with poor credit.
2006-09-22 01:21:10 · answer #3 · answered by Agaricales 2 · 0⤊ 0⤋
An example would be...money in the bank - in a savings account where you get your credit card. You keep the money in the acct, which is secured, until you pay off your credit card - faithfully. (To build credit). In case something happens, you have secured money in the acct to back you up, or protect yourself so to speak.
2006-09-22 01:27:02 · answer #4 · answered by bobbie e 3 · 0⤊ 0⤋
It means that you've deposited funds that your purchases count against. They're mostly used for rebuilding credit and as throwaway accounts. I use one for online purchases. I find out what the total will be and load only that amount on the card. That way if someone does swipe the number all they get is an empty account.
2006-09-22 01:19:53 · answer #5 · answered by Anonymous · 1⤊ 0⤋
Your credit is "secured" by a cash deposit that you make with the credit issuer. in the event you don't make the required payments, they will liquidate that deposit to pay (or partially pay) the debt.
2006-09-22 01:21:46 · answer #6 · answered by SDD 7 · 0⤊ 0⤋
Usually they want you to have the money deposited in an account for you to draw on. Actually, your usuing your own money.
2006-09-22 01:51:09 · answer #7 · answered by Tamara 4 · 0⤊ 0⤋
Get all the gen here.
2006-09-22 03:55:06 · answer #8 · answered by Anonymous · 0⤊ 0⤋