I was looking into getting a secured credit card, meaning- I prepay for whatever I will be able to spend; so why is it that they have annual percentage rates for a card that doesn't even use their money? The definition of an interest rate is how much the borrower will pay on a LOAN- as this is no loan, I don't understand how this can be applied here?
2007-10-24 17:13:20 · 5 answers · asked by makeshift760 1 in Business & Finance ➔ Credit
A secured credit card and a pre-paid card are two different things.
A pre-paid card like greendot is like a gift card. You pay money and it's loaded onto the card. You use the card and the balance goes down.
A secured credit card is an actual credit card account. You deposit $x which is held as collateral for the line of credit. You charge on the card then get a monthly statement billing you for those charges. You then pay all or part. If you carry a balance, you are charged interest.
2007-10-24 17:22:30 · answer #1 · answered by bdancer222 7 · 1⤊ 0⤋
I was in the same situation as you. Turned down by several banks. Capital One approved me for a card, though, and that was a year ago. Now I have an 750 credit score, a car loan, and a Citi card as well. Try capital one. And as far as paying interest, I'd have to say that's crap. I've almost always paid my Cap One card on time, there was only a month or two that I carried a balance and paid interest, and my credit score is just fine.
2016-05-25 17:31:07 · answer #2 · answered by marybeth 3 · 0⤊ 0⤋
Here's the deal ( I work for a bank in credit card so here's the facts) opening a secured card is still considered a credit card, yes you determine the credit line according to your deposit but your money is used as collateral for the account to ensure that if you default the bank wont lose there money. Secured cards are for individuals with poor or no credit history . Typically after six months or one year you'll get your deposit back and your credit card will go unsecured. But your not using your own money while the card is secured.
2007-10-24 17:23:34 · answer #3 · answered by that hot chick 6 · 1⤊ 0⤋
Because that's how they make money. If you want an interest free card, get a checking account with a debit card.
2007-10-24 17:20:36 · answer #4 · answered by Josh 6 · 0⤊ 1⤋
I hope you get an answer to this as I would like to know.
2007-10-24 17:22:11 · answer #5 · answered by Anonymous · 0⤊ 1⤋