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Qualities of Good Secure Credit Card

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Secure credit cards are an important building step in bumping up your credit score. Secure credit cards provide the basic training necessary to get your credit back on track, and show the credit card issuers that you are worthy of the credit you are borrowing.

Choosing a secured credit card can be hard, because much information isn’t in the mainstream media about these types of cards. Most of advertising is spent on getting consumers accustomed to unsecured credit cards, and even pre-paid credit cards.

Understandably so, it can be hard sifting through the junk offers and picking a quality secure credit card that can actually help you make a change in your credit score. A good secure credit card is one that can help you, and if the credit card issuer doesn’t report your payment history to the major credit card reporting bureaus, then having a secured credit card isn’t helpful. Make sure to double check that your secure credit card will be reported to the three major agencies — TransUnion, Equifax and Experian.

If your payment information isn’t being reported then it will not help your credit score. Many cards promise this, but never follow through. It is your responsibility to stay on top of this.

A good secure card may also charge an annual fee. Don’t be deterred if the secured credit card that you are interested in charges you an annual fee somewhere between $18 and $40, but you should be worried if the secure credit card issuer asks for an upfront fee other than your security deposit. Some secure credit card issuers may throw in an application fee upwards to $250; try to steer clear of these.

A security deposit is required for all secured credit cards. This is the collateral in case you can’t make your payments for some reason. After you put up the security deposit, you get a credit card for that amount which you can use at a variety of locations. You can use the card as a credit card and pay off the balance when the bill comes, if done consistently this can really improve your credit score.

Secure credit cards also give you a little bit of interest to — .1% interest isn’t something to lose control over, but it’s an added benefit of using a secure credit card.

When shopping for a credit card ask about the interest rate, as well as when you will be able to get an unsecure credit card with that particular credit card issuer. Once you are eligible for an unsecure credit card, you can close your secure account and receive your security deposit back.

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