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Posted in Credit Cards
What is a secured credit card?
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Question By
scooby76

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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. 

Response by
ashlet925

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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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Response by
vendejp

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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.

Reply by
somethinkdifferent

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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.

Response by
x6static9x

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Helpful to 7 out of 7 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. 

Reply by
atefatef

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Helpful to 18 out of 20 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.

Response by
jennica415

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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

Reply by
djtimex1

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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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Response by
rabidhunter

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I need to be a bank
Helpful to 5 out of 6 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.

Response by
saintsnspurs

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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

Response by
Gersen40

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Helpful to 2 out of 3 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.

Response by
damontardy

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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.

Response by
dalessandrct

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what about orchard bank visa card? is it like capital one? 

Response by
claudia75741

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Helpful to 1 out of 1 people

Maybe this comment arrived too late, but Orchard is now Capital One (They'll finish the merge around July 2014, tough)

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Reply by
Casacas

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