secured credit card?

Question

What exactly is a secured credit card?

Answer 1

A secured credit card works exactly like a regular credit card, the only difference is that a deposit is placed upfront that would be used as collateral for a credit limit in the same amount. The deposit would not be used to pay on the balance, you still would have to pay either the minimum balance, or the whole amount in full, on time every month. The deposit would only be used if the account became delinquent where it would be closed and then it would be used to pay the balance. A good advantage with secured credit cards is that the credit limit can be increased by adding to the deposit, and also the deposit gains interest while you're building up credit. Usually it takes 9-18 months for the card to change over to a regular card, providing you've paid on time every month, and used the card lightly my making small purchases on the card. I've posted links to several secured credit card companies, including Bank of America which Scotty had mentioned. Citi also has a very good secured card where you can gain interest on a certificate of deposit at a very good rate.

Answer 2

I am doing the same thing with a $300 card accept I charge the card half way to 150$ and pay it off every month so there is no interest. The larger the amount the more credit but keep in mind if you're card has more than half its balance used up at the end of every month it actually lowers the score and sends up red flags . So charge half the balance every month and pay it immediately. I am using the Bank of America secured Visa and it so easy to pay it off on line before its even due with a linked checking account . Really I consider it no risk since I am paying no interest and I just use it for groceries. Its the same as using my check card accept I get credit so why not charge a little more and receive the benefits. Good luck with your credit ! about the comment on the high fees Bank of America does not charge those silly fees . Mostly the on line No name banks do that but not a reputable bank some reputable banks may charge an annual $50-60 but that's pennies when it comes to the hardships you can suffer from bad credit

Answer 3

A secured credit card is a credit card issued by a bank in exchange for you putting up a savings account for "security."

In other words, you put up $300 in a savings account, and the bank will give you a credit card with $300-500 credit limit. As you develop a good payment history, the bank may at some point in the future let you have your security back, or they may increase your credit limit.

Bank of America has a great Secured Credit Card program.

Answer 4

A secured credit card requires you to make a deposit against the card's credit limit. Your credit limit will usually be a percentage of your security deposit or it may be the same as your deposit. Many banks place your deposit into an interest-bearing savings account where it stays until you close your account, upgrade to an unsecured credit card, or default on your credit card balance.

Answer 5

It is a credit card with a bank who takes a deposit (usually up to a maximum of $5000) which is placed in a savings account. This savings account is frozen as to your access to it because it guarantees repayment of the credit card, which then has an identical limit. Usually after one to two years, if your credit score improves, the savings account will be released, and the credit card will be exchanged for an unsecured card. The new unsecured card will be reported to the credit bureaus as if it had been started at the date of the original secured card - and will look good to the scoring systems.

A secured card is reported as such to the credit bureaus and is scored differently than a pure unsecured card.

The secured card program is an excellent way in which to rebuild a lot of credit fast if you have good income, and just had a hiccup in your credit.

Answer 6

I would suggest that you stick to debit cards rather than a credit card. A secured credit card has many features meant to keep your information safe. Check this custom written essay written by Writengine on Credit Cards to know more

Answer 7

Secured credit cards are a great way to rebuild your credit. Most secured credit card companies require a deposit equal to the credit line your are seeking. Make sure they report your payment monthly to the major credit bureaus. Making your payments on time monthly will increase your credit rating. You will also get you deposit returned to you after one year, turning your secured credit card into a unsecured credit card.

Answer 8

Maybe you can try below website to get the information you need. It's about secured credit cards articles for your second opinion.

Answer 9

A secured card requires a cash collateral deposit that becomes the credit line for that account. For example, if you put $500 in the account, you can charge up to $500. You may be able to add to the deposit to add more credit, or sometimes a bank will reward you for good payment and add to your credit line without requesting additional deposits.

Answer 10

A credit card linked to a savings account. The funds contained in the account may be claimed by the company issuing the card in the event that the holder fails to make the necessary payments. This arrangement allows the issuer to take on riskier credit card applicants.