Posted in Consumer issues, Credit Cards, Money, Money Finesse, Secured credit cards
Once you have a secured credit card, the idea is to establish a payment history and credit worthiness.
*Make sure that the bank that issues your secured card reports to the three major credit reporting agencies.
*Use the card to make a few purchases monthly, no more than you can easily pay back. Don’t carry a balance.
*After you have had the card for at least a year, apply to the bank for an unsecured card. Now that you have established a history of paying on time, the bank may grant you an unsecured acount.
One bonus of a secured account is that during the time your money is on deposit as collateral for the credit card account, you will earn interest on it. If you move on to an unsecured account, the deposit may have to remain in the secured account for a period of time, so that the bank can be sure it will cover any stray charges that come in after you close the account.
Posted in Credit Cards, Money, Money Finesse, Scams, Secured credit cards
There are many legitimate secured credit card offers out there, but there are also many that are scams. These show up as ads, often guaranteeing to get anyone a credit card regardlesss of credit history.
They may claim “no credit check”. They don’t specify that it will be a secured card, and they don’t tell you that they are not going to be issuing the card. Instead you are instructed to call a 900 number, which will cost you money, and all you will receive in return will be a credit card application or a list of banks that issue secured credit cards. You also don’t get crucial information about the offer, such as interest rates and fees and the amount of the required security deposit.
Legitimate offers won’t charge you to contact the company about the offer. Regardless of whether it is a secured or unsecured credit card, all creditors are going to run a credit check before extending credit to you, no one can “guarantee” credit to “anyone” with “no credit check”.
Beware of ads that “guarantee” a credit card. You could get a hefty charge on your phone bill, but what you probably won’t get is a credit card.
Posted in Banks, Credit Cards, Money, Money Finesse, Secured credit cards
A secured credit card is one that is issued when a deposit is on account with the issuing bank. These cards can be a good stepping stone to establishing or rebuilding and repairing poor credit.
A secured card requires a cash deposit. Generally the amount of that deposit is the amount of your credit limit. Some banks may extend you further credit without requiring another deposit if you establish a good payment history.
A list of banks that offer secured cards and their interest rates and fees can be found here.
