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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.