Secured Credit Card

Secured credit cards are a great way to build up credit if you have a bad or non-existent credit rating. You are guaranteed to be accepted, and within a year you can establish or begin to noticeably repair your credit. They are not normally the best deals in terms of interest rates, and overall financial effectiveness, but they’re not so bad. Oh, who am I fooling, secured credit cards are the worst deals out there, and are pretty much a last resort for people that can’t get a regular credit card.

When I applied for my first credit card, I was rejected two or three times. I wasn’t really sure why at the time, but the banks alluded to ‘a poor personal credit history’. This mystified me, because as far as I understood I had no credit history whatsoever. I was in my early 20’s and finishing up college, and I had never bounced a check or paid a bill late in my life. Well, not very late at least.

The banks I applied to kept offering me secured credit cards instead, but I resisted them at first. I attempted to get a credit report, but it came back blank, confirming my suspicion that I had no credit history. So, here was my predicament. I had no credit, but I couldn’t establish any credit because I couldn’t get a credit card, because I had not credit. How is that for a catch-22?

I could almost hear Joseph Heller laughing in his grave when I finally decided to sign up for a secured credit card. Secured credit cards all work with the same idea. You give the bank or credit company a deposit, and they give you a credit line which is usually equal to the deposit you gave. The bank is therefore at zero risk because if you fault on your payments they just take it out of your deposit. You, on the other hand, have to give up a chunk of your funds to sit idle with the bank, collecting no interest, and you have to pay a fairly high interest on your balance.

The good news is, after a period of time that is usually about a year, you get your deposit back and are then given a normal, ‘unsecured’ credit line, assuming you were good with your payments. If you had especially horrible credit before hand, or were late on some of your payments, it may take longer than a year to get your deposit back.

So, overall, secured credit cards are a kind of last resort, as they are never really a good deal for you. However, they are an excellent way of repairing or establishing credit.

Secured Credit Card related articles:

Security Camera System
Home security systems have come a long way in recent decades. Many homeowners opt for high-end products that are quite expensive; maybe too expensive for the average homeowner. A security camera system is an example of a high-end product that many of us w...

Signs Of Depression
For about thirty years, I showed, felt, questioned, and tried to investigate what I didn’t realize were what 13 to 14 million people experience in any given year: the signs of depression that have now been studied, therapeutically dealt with, and successf...

Singing Competitions
Singing competitions are not a new thing, though one just tuning into those being televised might think so. When we—ahem—forty-somethings were kids, we participated in talent shows in school, had Fourth of July singing competitions, and even had slim opp...

Single Cup Coffee Maker
Isn't it time for that morning cup of java? This seems to be the trend in American households. We all want to wake up to that fresh aroma of quality coffee beans. In fact, many cultures have adopted the same regime. It's been around forever. The old caffe...

Song Lyrics
Those of us who love words usually love poetry, and those of us who love poetry most likely have an appreciation for song lyrics. We collect the song lyrics to our favorite songs. We quote specific lines of song lyrics.

But now, of course, the ...

Pocket Links

Better Living for a better tomorrow

Secured Credit Card

Secured Credit Card related articles:

more Pocket Links articles: