|
|
|
[Friday, November 14, 2008]
How Secured Credit Cards Work
Credit card nation - that's what Americans are called for their addiction to and overuse of plastic money. But with such a huge number of credit consumers, still many have not a slightest idea where to go and what to do to obtain their fist plastic and start building payment history with banks. Major Banks do not feel comfortable about unsecured lending to people without any credit references. And if you do not get a credit line you cannot grow those references. That's' where the catch is, so you actually have to find an institution who'll agree to work with you as a beginner. A secured credit card is easily issued to beginners and is the best tool to establish positive payment references so important for your borrowing abilities in the future. A secured card looks and works like an ordinary major bank credit card. This means it allows making purchases now and paying for them later, it has a whole range of fees and interest rates typically found on any other plastic. It reports to credit bureaus and shows up in the report as an ordinary credit line. The most valuable feature of a secured card is its credit building program and relatively easy availability to those with no or bad payment history. The price you pay for easy access to credit seems for many unreasonably high. Secured card grants approval if you meet its major eligibility requirement, in other words, you agree to open a security savings account with the bank. The deposit amount determines your credit line and functions as collateral if you fail to pay bills. Most issuers allow you to charge up to 100% of the amount deposited. The minimum deposit amount required on most secured cards is $300, the maximum being $10,000 and more. Figuring out which size of deposit you need, 5% of the annual income will do. Some may think it's pointless. Where do I draw funds for a savings account when I'm looking for a credit card to get those funds? The thing is you need to get on track somehow. If you're ready to pay now, you may grow eligibility for lowest APRs, high limits and rewards cards later.
There are some things to watch out when applying for a secured offer online. First make sure it reports to all major national credit bureaus. As the main reason for using a secured card is to establish credit, monthly reports of your good payments will help grow a positive reputation for you faster. Secured Visa cards from New Millennium Bank and Applied Bank provide monthly credit bureau reporting, so feel free to apply online.
Second, find a secured card application best matching your current financial situation. Mind it that there are lots of fees associated: start-up fees, application fees, finance charges and, of course, penalty fees.
And finally, apply at the issuer that provides interest earnings on the deposit. The average interest rate ranges from 1% to 4%, but some secured Visa offers from Millennium Bank provide a special high introductory savings rate on the collateral deposit. The savings rate becomes critical as the deposit amount grows. Copyright © 2005-2009 Credit-Land.com, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
|
|
|
Ask a question |
|
|
|
Use search form or post your question. |
 |
User Name:
anthony betts |
Date:
April 1, 2009, 3:43 pm |
 |
What is the difference between secured and unsecured credit cards? |
|
Answer:
Unsecured credit cards do not require you to provide any sort of collateral. When you get an unsecured card, your line of credit is not secured by collateral, and if you cannot pay your debt back for some reason, then you will not lose anything, although you will damage your credit rating. Due to the high risk associated with unsecured credit, it most often is issued to customers with a long and favorable credit history. In general, unsecured cards are premium card offers with 0% APR promotional periods, no annual fees and rewards. However, while many card issuers offer a range of unsecured credit cards for sub-prime borrowers, they often charge sky-high APRs and substantial fees. When you apply for a secured credit card, you are required to open a savings account with the issuing bank and provide a cash collateral deposit with it. The cash collateral determines your credit line (the more you deposit, the more you can spend), and it also protects the card issuer from the risk of loss if you stop making payments on your card balance. Each time you miss a payment, the amount due will be withdrawn from your cash collateral deposit. As a rule, secured credit cards are issued to people with no or bad credit history, and they can help such cardholders build up their credit on reasonable terms. You should consider applying for a secured credit card if you do not qualify for a regular unsecured card offer. |
|
|
User Name:
elizabeth concepcion |
Date:
May 7, 2009, 7:19 pm |
|
|
I have bad credit. How can I fix it? |
|
Answer:
The best way to fix bad credit is to apply for a credit card. The payment history is a very important component of the credit scoring formula. So, if you want to improve your credit history, you need to consider credit cards designed specifically for your type of credit. We suggest you to take a closer look at secured credit card applications. Secured cards provide a safe way to rebuild your credit. Take for example, the Secured Visa® Credit Card from Applied Bank. This card comes with no credit and income requirements, plus it gives a really low fixed APR on new purchases. Another great feature of this secured card is monthly credit bureau reporting. You may also consider the new Secured Black Card from Public Savings Bank. The greatest feature of this deal is a 0% APR for 6 months on new purchases, plus it has no annual and setup fees. When applying for this card, the only requirement you should meet is to place a minimum deposit of $300 on the FDIC insured account. Alternatively, you may review the UltraVX Visa Card from MetaBank. This secured card comes with really innovative features and options, including travel rewards, Credit-On Demand, direct deposit, free alerts, not to mention monthly reporting to major credit bureaus. Take your time to look through these credit card offers. Compare these cards side by side and apply for the card that best fits you. |
|
|
User Name:
Lee Grimshel |
Date:
May 11, 2009, 8:29 pm |
|
|
Best Credit Card For A Person With Bad Credit
I am trying to build credit, Im being told that my credit is "thin" and I should apply for a credit card. I do not want a prepaid card and I am afraid if I'm turned down for an unsecured card(s) it will hurt what credit I do have. Help!
Hi, do you provide any kind of secured credit card that helps ppl without credit history to build up their history?
Thanks. |
|
Answer:
Secured credit cards are a smart choice for those who want to establish or re-establish their credit history. If you want to start building your credit rating in a safe and responsible way, you may be interested in the following secured credit card offers. The Secured Black Card from Public Savings Bank is a good option for those with bad or no credit. It comes with really good terms, such as a 0% APR on new purchases for 6 months, no annual fee and monthly reporting to major credit bureaus. Secured credit cards require you to make some minimum deposit that will serve as collateral. This card is no exception, the minimum deposit in FDIC insured bank account is as low as $300. Another secured card you may wish to apply for is the Secured Visa® Credit Card from Applied Bank®. The strong points of this offer are a low fixed APR that will not change even if you're late with your payments, a moderate annual fee, credit bureau reporting and $0 fraud liability for unauthorized purchases. You can also review the UltraVX Visa® Card from MetaBank. This card comes with guaranteed approval, meaning there's no credit check, no minimum income requirements and no bank account required. The most impressive feature of the UltraVX Visa® Card is the Clear Rewards feature. In other words, you can accumulate travel rewards on your purchases. With powerful account features such as direct deposit, free alerts, bill pay and others you will be able to manage your credit card account responsibly. Review these secured credit cards, compare their terms and features and apply for the card that best meets your financial needs. |
|
|
User Name:
taqui |
Date:
May 21, 2009, 8:38 pm |
|
|
I have bad credit but I want to know that does AmEx or Discover credit card have secure credit card. If they do, where can I apply for it? |
|
Answer:
American Express and Discover Card are companies that provide credit products for customers with good or excellent credit. Discover Card offers certain cards for fair credit history, but they're designed for students only. If you want to apply for a secured card with good terms, feel free to review the following secured credit offers. The Secured Black Card from Public Savings Bank can be a good choice for you. It comes with no annual fee and a 0% APR on purchases for 6 months. In addition to that, it reports to all 3 major bureaus and gives a generous spending limit. The great thing about the Secured Visa® Credit Card from Applied Bank® is that it offers low long-term interest rates on purchases and it comes with no income or credit requirements. Alternatively, you may review the UltraVX Visa® Card from MetaBank. This secured card comes with a set of innovative features, including travel rewards and services that will help you maintain your account responsibly. Compare these secured offers side by side and apply for the card that is right for you! |
|
|
|
RELATED TOPICS
|
 |
|
|
|
 |
Public Savings Bank
| 0% APR for 6 months on purchases. | | No Annual Fee. | | We report to all 3 credit bureaus. |
|
Applied Bank®
| 9.99% Low Fixed APR - Rate Won´t Change Even If You´re Late! | | CHOOSE Your Credit Limit Up To $5,000.6 | | $0 Fraud Liability. |
|
|
RELATED ARTICLES
|
 |
|
|
|
|
