The content is accurate at the time of publication and is subject to change.
It depends on your personal situation. Can you manage a traditional credit card or are things a bit shaky for you at the moment? When your situation stands on rocky, uneven ground, it’s the best time for you to invest in a secured credit card.
Not everyone out there has the best credit. We all would like to be the exemplary definition of “credit owner” but unfortunately that’s not the case. If your credit should fall heavily in the negative category (or you’d be embarrassed to show your score even to your own mother) then you will want to consider the world that is the secured credit card.
The best facet of these cards is their ability to help you restore your credit back into something of good shape. With a secured credit card, you put down the amount you will max out with your card. Say you want to put $250 on your credit card now that is totally under your control. That money is already in there.
And if you close the account in good standing, you will get the money you put aside ($250, allegedly) back. Sort of like a security deposit on an apartment. Yeah, if you have bad credit, of course you can go ahead and get the same credit card your peers carry around. If you go down that unstable road, you will face a lot of obstacles in your path.
Secured credit cards carry their own burden, though, like any other tool we use for our finances. How so?
You will have to guarantee your card issuer a deposit of at least $200. So if you can’t round up that chunk of change, you are out of luck. Annual fees, too, can range up to somewhere around $50.
So, the short answer to a long question is if you are trying to rebuild your credit into an outstanding perspective, secured credit cards could be your best friend! Use the secured credit card up for two years before making your leap back into the world of unsecured credit cards, and by then (guaranteed you have practiced responsible card ownership) you should be able to get your hands on a nice one.
If you apply for a credit card just once per year (sometimes inquiries can do this) your score will be unscathed, so rest assured, on that note.
Otherwise, if you are in good credit standing, go ahead and keep with unsecured credit cards, unless you really want a secured alternative.