The Advantages of a Secured Credit Card
It takes time to fix or repair your credit. Even if you pay
off all your debt today, your credit history will still be there until
you gradually build a better credit rating.
The most important thing to do is to make payments on your outstanding debts
each month - no matter how small.
Once you have your credit card balance under control and can afford to
put a little money aside each month, consider getting a secured credit
card.
You will be able to get a secure credit card even with a bad credit
history. The reason for this is that you need to deposit funds with the
credit card supplier to cover the debts you incur using the card. There
is no risk to the card provider since they are not really extending
credit but relying on the deposited funds to cover the charges you make.
These cards are also known as debit cards.
Most institutions charge only a nominal fee to provide a secured credit
card to cover their accounting and bookkeeping costs. There are advantages
to both you and the supplier.
The secured credit card supplier is assured
that the funds are there to cover your expenditures and you benefit by
reduced or at times nearly zero % financing charges.
Depending on the
supplier, your credit limit will be 50 to 100% of your account balance.
Remember to replenish your account each month by at least the amount you have
charged against the account.
Another advantage to you for using a secured credit card is that this will
help you to achieve a better credit rating.
Don't be timid - shop around and negotiate the best deal. Some secured credit
card providers
will let you earn interest on your balance or waive part or all fees
depending on the balance you keep in your account.
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