What is a secured credit card? Can I get it if I have bad credit?

Question

Are secured credit cards a good choice for people with bad credit? Where can I get a secured credit card online?

Answer 1

A secured card is a credit card that is secured by your deposit in an interest earning savings account. It is for those who are looking to rebuild their credit, but are having trouble getting an unsecured card. Most banks report to all 3 credit bureaus. By making your monthly payment on time, this is the surest way to build or re-build your credit. To learn more or apply for a secured credit card, you may go here: http://www.creditcardsa-z.com/Secured_Credit_Cards.asp

Answer 2

It would be nice if you could make it through life without ever having to use a credit card. The fact is that many businesses require credit cards, even if you plan to use cash for the purchase. Hotels, car rentals, and airlines are just a few of the places that credit cards are required.

If you’ve never had credit or have a poor credit history, it might be difficult to get a regular credit card. In these situations, a secured credit card might be the only way to improve your credit standing.

Secured credit cards are viable options, but before you get one, there are some questions you should have answered.

What are the costs?
Like many regular credit cards, secured credit cards have costs. Some of the most common costs include application fees, processing fees, and annual fees. Find out the fees for the secured credit card before applying. Stay away from cards with high fees that use most of your security deposit.
How much is the deposit?
Secured credit cards are “secured” with a deposit that's held in an account and used when you default on your payments. Many secured credit cards have minimum and maximum deposit limits. Some secured cards place deposits in an interest-bearing account. Find out if your deposit will earn interest and if so, how much.

In what situations is your deposit used?
Some creditors only use the deposit in cases of severe delinquency, e.g. 5-6 months past due. Others use it for a single late payment. Knowing the situations that the creditor will draw from your deposit can help you be more disciplined, especially if you’re concerned about getting your full deposit back.
Are there eligibility requirements?
Income and age restrictions might apply to some secured credit cards. Even though you’re willing to put down a deposit for a credit limit, card companies still have requirements in place. Many secured credit card lenders require borrowers to have a checking or savings account with their bank before extending secured credit.
What will your credit limit be?
Your credit limit isn’t always the exact amount as your deposit. It can be some percentage of your deposit, making your credit limit less than the deposit.
What is the APR?
The APR, or annual percentage rate, is the interest rate applied to balances that you carry beyond the grace period. The higher the interest rate, the higher your finance charge will be when you carry a balance.
Are timely payments reported to credit bureaus?
If you want the credit card to help establish or re-establish credit, your payments must be reported to the major credit bureaus - Equifax, Experian, and TransUnion. Secured credit cards that don’t report to bureaus won’t help your credit rating. Make sure the card isn’t reported in a way that reveals it as being a secured card to prevent bias from future lenders.
Can the card be converted to an unsecured credit card?
The best secured credit cards allow you to convert to an unsecured after a period of timely payments. Unsecured cards often have lower fees (or no fees at all), a lower interest rate, and fewer restrictions.

taken from: http://credit.about.com/od/usingcreditcards/bb/securedcard.htm

Answer 3

Unsecured credit cards are available for bad credit clients, however, the issuing banks charge high fees to cover the risk of extending credit to a bad credit client. You can expect to pay anywhere from $200-$350 or more in fees which the bank will keep, you do not get that money back. Those fees are upfront costs for obtaining a unsecured credit card for bad credit. In some cases, the bank will allow you to pay the fees over two or more months. In addition, unlike secured credit cards, if you have bad credit and apply for an unsecured credit card, it is not guaranteed that you will be approved. You may be turned down for an unsecured card, even if you are willing to pay the high fees.

Answer 4

A secured credit card is a credit card where you give them money in advance equal to your credit limit. You can then use the credit card like normal because they already have the money in case you don't pay. This is designed for people with bad or no credit to help them establish some good credit.

Answer 5

You can get a secured credit card with bad credit, these cards usually ask you to send in money first. This are really good to help you rebuild your credit. Just make sure you pay on time.

Answer 6

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 7

You might want to try a "Guarenteed Approval Card".. Look at http://preferred.ecreditdirectory.com/categories/guaranteed-approval for more information...

Answer 8

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