Shopping for the Best Secured Credit Card


If you have poor credit or and no credit at all, often, the best way to get started reclaiming your good name is to find the best secured credit card there is and then to get it. The worst mistake you can make for your credit would be to stay off credit cards altogether. When the credit reporting bureaus don’t see any credit information on you, you are giving them no reason to raise your credit score. Well, now you’re aware that you need to get a secured credit card, what exactly makes something the best secured credit card for you?
With a regular credit card, the issuer looks at your respectable credit score, thinks that it’s okay to trust you with a spending limit, and they just let you have a card with a spending limit that they take a chance on. With a secured credit card, they don’t have to trust you. You leave money on deposit with them. And they allow you to spend as much as your deposit goes (and more, sometimes). If you don’t pay back your balances for a long time, they take money out your deposit to pay your bill.
What that means is, that as long as you do pay your bills, they just hang onto your money. Do they pay you interest on it?
That’s the way it started with secured cards. These days though, most of them don?t pay interest. A good rule to go with when you go around looking for the best secured credit card would be to find one that actually pays you interest. Those are the honest ones.
Why do you get a secured credit card? Usually, it’s because your credit score isn’t what it should be. Well, getting a secured credit card and then using it responsibly should be a great way to get your credit score up again. That would only work if the credit card company that issued your secured credit card were to go and report to the credit reporting bureaus how responsible you are. Unfortunately, there are some credit card products that don’t do this.
Ask them before you get such a credit card if they completely report your credit card information to the bureaus. Some of them will say “Yes, we do report”; but what they report is when you miss a payment or do something to hurt your credit. And make sure that you get a proper secured credit card that is actually labeled as such. Banks have this nasty habit of marketing a debit card or prepaid credit card as a secured credit card. It doesn’t do the same thing for your credit to get one of these other products.
These days, unsecured credit cards will also offer you some credit over and above what you deposited with him. That’s a nice thing. Try to see if you can get such a thing.
Now when you get a secured credit card, your already giving them money. What that means is, that they accept a zero risk handling your account. It’s unfair that they should charge you any interest at all. But they do, and that’s just a fact of life. We want to make sure that they don’t charge you too much. First of all, ask to see you complete fee schedule. You want total of all the fees they charge you and see if it is 25% of your deposit. If it goes above that, you know that they’re breaking the law. And do make sure that you know exactly when you need to pay your balances every month. You don’t want to pay them any interest.