SECURED CARDS TO REPAIR CREDIT HISTORY

2007-03-08 10:33:40

( Business )



What Are Secured Cards

Secured cards are credit cards that require cash collateral. The said amount is used as credit line for secured cards. You need to add a deposit to the cash collateral if you want to increase your credit line. Banks usually automatically increase your credit line without adding a deposit once you have established your good repayment performance. Secured cards are a type of credit card available to people who have either no history of credit or have to repair a poor credit performance. It can be used even for merchant credit card processing.

Where to Avail of Secured Cards

Secured cards are offered by both banks and credit unions. Credit unions sometimes offer their members lower rates and sometimes they forego annual fees too. It is better if you can avail of secured cards with no application fees.

Banks, however, are starting to veer away from secured cards. They are starting to offer more packages for unsecured cards with higher interest rates and lower credit limits. Still, secured cards are sometimes the best option for people who are rebuilding their credit performance after a disastrous event in their lives like bankruptcy, divorce and job loss.

Watch Out for Dirty Tricks of

Beware of telemarketers who illegally issue insurance or charge fees to secured card applicants. Applicants are duped to paying money but never receive their cards. Some credit card issuers also try to earn money by charging applicants with insurance premium way beyond the normal amount of insurance. Applicants should be vigilant of these tricks and get plenty of information when shopping around for secured cards providers.

Make sure that the credit card providers you are considering to apply with are reporting to the credit bureaus. Secured cards are your vehicles in repairing your credit history. Thus, you have to make sure that your repayment performance for secured cards is reflected in your credit history report.

You must use secured cards to build your credit performance. Do not leave a balance on your secured cards. Make sure you pay in full every month.


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