Secured Credit Cards
For consumers who have no credit history or who have poor credit scores, opening a new line of credit can seem
Many people think that having no or poor credit will keep them from qualifying for credit cards with reasonable
interest rates and low fees. Luckily these fears are unfounded. There are numerous options for people with less
than stellar credit. Specifically, secured and partially secured credit cards are ideal ways to
rebuild credit while using credit.
Secured credit cards are backed, or secured, by an associated with deposit into a bank account. Financial
institutions issuing secured credit cards use the deposits as collateral for the line of credit and allow card
users to charge a certain percentage of the deposit. For example, if you have deposited $500 into a savings account
associated with your secured credit card, and the lender allows you to use charge up to 50% of your balance, you
can charge $250 on your credit card. Secured credit cards help build your credit history when positive repayments
of your debt is reported to credit bureaus.
A great option for people who have begun to rebuild their credit is to find or negotiate a partially secured line
of credit. Partially secured credit cards require you to deposit only a certain percentage of the entire credit
limit. In other words, a lender will allow you to charge more than your deposit amount on your partially secured
credit card. For example, if you deposit $500 into a savings account associated with your partially secured credit
card, the lender may allow you to charge say $750 on your card. This line of credit is partially secured by
Why are partially secured credit cards advantageous? If you have no credit or poor credit, getting a partially
secured card will be easier than qualifying for an unsecured card. Additionally, if you plan to make large
purchases, a partially secured credit card will give you the flexibility to make purchases without worrying what
your current deposit balance is at any particular moment. Retailers have no way of knowing if the card you use when
making purchases are secured or not. Finally, if you are practicing responsible money management, a partially
secured credit card will help you stay on top of what you spend.
Right now is a great time to find partially secured credit card offers. Evaluate the terms of the offers carefully
as there may be fees or down payments to consider when deciding on the right card for you. Partially secured
credit cards are an ideal way to retain purchasing power while managing your money, and they can help you
build your credit scores at the same time.
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