Reap The Benefits Only A Secured Credit Card Can Offer
If you looking start building credit for the first time, or
rebuilding your credit after a bankruptcy or credit problems, a
secured credit card can be a great way to start.
A secured credit card is basically the same as an unsecured
credit card; it has the same features, flexibility and use.
There is no print on the card that identifies it as a secured
card--that's just between the card holder and the issuer. And
just like any other credit card, it's accepted at merchants
throughout the world who accept credit cards.
To get a secured credit card, you must open a savings account or
a CD account in your name. Next, you deposit a certain sum of
money into the account, which will serve as the collateral for
the card. For example, if you deposit $1000 into the bank
account, then the credit limit on the card will be $1000. If you
are ever in default with the card, the bank will have the right
to take the money from the savings or CD account to pay the
balance. The money you deposit will earn interest, but you will
be restricted from removing it from the account at any time. (Of
course, you cancel the card with no balance on it.) The secured
credit card bank will determine the amount of the deposits
required to receive a secured credit card.
You will be responsible for paying the credit card bill every
month, just like you would an unsecured card. Every time you
make a payment on time, it will show as a good mark on your
credit report. But be fore warned! Every time you are late, that
will show up, too! In addition, just like a regular credit card,
you will pay fees and interest if the balance isn't paid in full
each month.
Eventually, as you build a good credit history with the bank,
they may increase your limit on the secured credit card or offer
you an unsecured card with a low credit limit. Either way, you
are on your way to building a good credit rating, which will
allow you to live your life with more flexibility.
Could you benefit from some good marks on your credit report? If
so, you should check out what a secured credit card can do for
you!