A secured credit card is a very good option for those who are either rebuilding building or establishing their credit. By using credit wisely and making your payments on time, you will be building a history of responsible credit use. And once you have built a history of responsible credit use, establishing better credit will become much easier.
This kind of card makes it easy to do a lot of the little things that are required to build up credit. Things like car loans, mortgages and home mortgages could be more difficult to get if you didn’t have a secured credit card. And once you have established some responsible use of credit, things like home equity loans and personal loans may be easier as well. There are a lot of great advantages to be had by making the choice of obtaining a secured credit card.
But how do you go about finding good credit cards? There are several ways to discover this secured credit card information you need. Here are three of the most popular ways to discover good credit cards:
Call your current credit card issuer. If you currently have a secured credit card, you may still be able to find out important information about the institution. Many credit card issuers will require you to make a security deposit when you apply for an account. The security deposit will go directly to paying off your balance every month, and it will affect your credit report.
Be sure to ask your security deposit amount. If your security deposit amount is lower than what your credit card issuer requires you to make, they may not be able to require you to make a larger security deposit. This is often the case if you have poor credit history or no history at all.
Check with the company. Many secured credit cards companies will offer special deals if you have a certain percentage in your bank account. It’s important to get this percentage in the account, because it will help you build credit score points. However, it’s also important for you to realize that if you don’t pay your balance on time, the security deposit will be forfeited. This means you’ll have to pay the forfeit amount without any benefits whatsoever.
Look around at other secured credit card issuers. You can usually find a good deal if you shop around. Some card issuers may have requirements on the type of account you’re applying for, so you may want to make purchases online to see if you can find a better offer. Sometimes card issuers won’t require a deposit, but may instead require you to make purchases with a particular dollar amount from their savings or checking account.
Find out if you need to make payments each month. While the majority of secured credit card accounts will let you make payments every month, some only let you make payments once a month. If you find a card that requires you to make payments monthly, look for one that offers the greatest variety. You should also check to see if you need to make a deposit into your savings or checking account. While many companies will only require you to make purchases using the funds in your account, others may require a larger deposit.
Check your credit score and history. You should know your credit score, because this will determine the maximum amount that you can borrow and how high the interest rates will be. You can get this free once a year. However, if you’re looking to take out a large amount of money from a new credit card, you may help improve your credit score by making sure that you use all available funds in your account.
Get as much money deposited into your savings or checking account as possible. This will help you get approved for a lower interest rate. Sometimes a company will require a cash deposit before they will give you approval. If this requirement isn’t necessary for you, consider paying cash for about 20% of your deposit. In most cases, the credit card company will provide an option for getting a larger cash deposit, especially if you have a higher credit score. It’s a good idea to pay off your balance every month to help improve your credit score, though, so make sure that you don’t just dip your budget when getting approved for a unsecured credit card.
The best secured credit cards will have low interest rates and no annual fee. They will also have a short grace period to pay your balance before you start accumulating interest fees and accruing late fees. You can make sure that you find a card with the lowest fees and lower interest rates by comparing a few companies side-by-side. This is where the World Wide Web can come in handy. The more information that you have about a specific secured credit card company, the better prepared you will be to make an informed decision.