Secured Credit Card Tips

What is a Secured Credit Card?

A secured credit card is a type of credit card that requires a cash deposit to be made when you open the account. The deposit acts as collateral for the account, and the amount of the deposit is usually equal to the card's credit limit.

Secured credit cards are reported to the three major credit bureaus, so responsible making payments on time will help improve credit scores over time.

Using a Secured Credit Card

For most people a Secured Credit Card is used to start their credit journey or to start rebuilding their credit after a significant Credit problem.

You must pay your Secured Credit Card bill on time. Even though you made a $500 or $1,000 deposit to get your Card you must pay your regular bill on time.

Remember you will be rated by the Secured Credit Card Issuer on whether or not you make your payments within the allowed payment time.

Normally you will have Twenty One to Thirty days to pay your bill from the Billing Date of the statement. This will be clearly stated in your statement.

I never recommend carrying a balance on your credit card. The interest charges are usually huge and it is really easy if you do not pay off your card for the balance to just keep growing.

Check out my article on The Credit Trap.

Comments

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