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Facts About Secured Credit Cards

August 8th, 2012 Posted in Financial Services

What is your credit rating like? For many people it tends to be quite poor and some – especially students or those who have never had a credit card – do not even have a credit rating at all however there is a way in which you can increase your credit status and we are going to look at them here.

Essentially a secured credit card works just like any other credit card. You pay for things on it and then you pay them off either at the end of the month when you are paid or you can pay a minimum amount each month and pay it off over a longer period of time. Both ways can help to improve your credit rating if it is poor however how can you even get a card in the first place if your rating is poor? Well a secured card is the way around this.

Think of it in the same way as you would putting down a security deposit when you rent a property. This is there so you do not take advantage of the property or the rent payments and it is the same with a secured card; rather than just being given the card free and with a spending limit attached to  it you have to put down a deposit which can be anywhere between 25-50% of the spending limit. This is the only difference between a normal card and a secured one and it means that you can use the card at will (only you and your card issuer know that it is a secured card) and see your credit rating rise as you use the card more and more and in an age when your credit rating is vitally important then this is a great idea in order to improve it.

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