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Question By
scooby76

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What is a secured credit card?
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Helpful to 22 out of 22 people

I like Wells Fargo secure credit card, it has helped me raise my score almost 100 points by adding a new type of account to my credit report. Also I can start show on time payments again after defulting on 3 cards almost 4 years ago. 

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I need to be a bank

Helpful to 7 out of 8 people

Secured credit cards are awesome,  for the banks that is.  You get people to give you their cash on deposit, so you can then lend them the exact same amount of money, no more.  Then you get to charge high interest rates and fees as if it were an unsecured credit line when really you have their money securing the credit line the whole time.  Genius!  Its a no lose situation for the bankers.

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Helpful to 23 out of 24 people

Capital one offers the best secured credit card option for people who need to rebuild bad credit,  At a minimum range deposit of $49 (if you qualify) you can start a $200 credit line. There is also a $29 anaual fee, but this is by far the cheapest secured credit card available. If you have no other options and need to rebuild your credit this is one way to start, and your $49 deposit fee is fully refundable when you close out the card, so its a nice way to get your credit score going again when all options are exhausted.

Reply by
atefatef

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Helpful to 10 out of 11 people

I have had that one for 9 months and I just got approve for a citi bank credit card with a $4000 credit line and a boscovos store card. It really helped builduing my credit score. 

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Helpful to 37 out of 39 people

Secured credit cards are a type of credit card that requires a deposit before it can be issued. Designed for consumers with poor credit, the deposit is collateral against a customer defaulting on their credit card payments. Most secured credit cards will provide a credit limit equal to the security deposit.

Historically, secured credit cards have high fees and interest rates even though there is a deposit against default. In addition, secured credit cards often have an application fee. We suggest consumers read all of the fine print on secured credit card agreements since there are often hidden fees.

For people with poor credit, secured credit cards are sometimes the only option.

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Helpful to 8 out of 9 people

To get the best rates possible, get a secured card with a credit union, if you're eligible to join one. I joined a teachers' credit union (my mom's had an account there for years, and family members are eligible), and they got me a good rate on a secured card that's really helped my score.

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Helpful to 22 out of 24 people

Nowadays it's difficult to get your first credit card without one of these.

I turned 18 this year and decided it was time to start my credit. This was the only thing I could get approved for without a co-signer. $100 deposit, $39 annual fee, and 22% interest. Pretty much sucks, but one of the only ways to start. After about 3 months of using it carrying over only a small balance like $5 or $10, my credit score was already 734.

Great to start credit, but don't keep it for more than a year and don't carry a big balance over or you'll just end up losing more money than it's really even worth. Plus you get your deposit back as long as you're good with it.

Reply by
djtimex1

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Helpful to 2 out of 3 people

i have one and i wanna get rid of it im in good standards but if i get rid of it will my credit drop oh since the card i got two unsecured cards

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Re:My credit score is 522

Helpful to 1 out of 1 people

I applied for a secured Credit Card with Capital One and was declined.........Please Advice

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Helpful to 6 out of 7 people

If youre looking to build credit i would suggest a  secured loan rather than a secured credit card. They both work the same but with the loan you are putting money into an account. With the secured credit card, you are forced to spend money and the interest rate is higher.

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Helpful to 1 out of 1 people

Casacas, you're a lucky one. I signed up for the same card a year and a half ago but had to put down my full balance ($500) just called them recently to get it unsecured and they said no but due to delinquent student loans. So even with a secured card and having perfect payments for a year and a half, doesn't mean anything if something else is wrong on your report.

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Helpful to 9 out of 9 people

Vendejp is right, be very careful about them.  It's not that they are bad, but they do carry a lot of hidden fees.  You will need to have money up front to get a secured card.  Your credit limit is set by the amount of money you set aside in that bank's savings account.  Many banks offer a secured card starting at a minimum of $100 but several banks require a minimum of up to $500.

On top of that, there may be application fees and an annual fee that you pay up front.  Unless you have that money set aside to make a the required deposit into a savings account and pay the fees, it won't be worth trying to apply.

If you do apply for a secured card, look for the cards that can turn into an unsecured card after a certain amount of time and will increase your credit limit.  These will be the most helpful.

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The Pro & Cons of Secured Cards

Helpful to 4 out of 7 people

The Pros: 

It's SECURED, meaning no one can gouge your bank account.

It's fabulous for online purchases.

You only load onto the card what you need

Some of them can help you build credit

The Con's:

There are often purchase fees

Sometimes there are monthly or annual fees

Typically you won't earn rewards or miles

**Read the small print before you engage in a Secured Card!

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Reply by
Casacas

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68 People Helped
Helpful to 4 out of 4 people

I have a secured credit card; it is the Visa BankAmericard from Bank of America. I received an offer by mail (I have a checkings/savings account with them) saying that if I deposited $99, they would give me a $500 credit card. I applied and was approved a week later. I have been using it since two months now.

PROS:

- They just implemented a cash back/deals option on their cards that I started to use (Things like 15% cash back on a restaurant, only once and in a period of time, then the other deal would be for movie rentals, etc.). It adds the cash back to my credit card, but I can use either my credit card or debit card to get the deal (you don't really need to have a credit card to get these deals, but it's good to point this out as a benefit).

- Reports to the credit bureaus

CONS:

- The APR is 24.99% (Very high) and it doesn't get any rewards/miles.

- $500 credit line for $99, and this is frozen for a year. (Good for not putting the $500 on cash, bad because you still have to put some money into it)

Honestly, this is a very basic credit card, but since my credit score is poor, it's more than enoug for me.

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