For those who have bad credit or no credit history and try one of the options for reconstruction, you must enter your credit history for the new secured credit card.
A secured credit card is a credit card that you provide collateral in exchange for a credit line. You pay a deposit, which extends in a separate account, and to provide a line of credit is. You can use your secured credit card anywhere credit cards are accepted, but you may have a lower credit limit. In fact, most of the time the credit limit based on your deposit.
If you show some responsibility, in general, you can convert your unsecured card credit to the secured credit card after a year. You receive your deposit, and you have the best credit card, which affects your favorable credit rating.
But what you should consider if a secured credit card to choose? You do not want to be stuck with a secured card, which for you makes it worse - and some cards may make things worse for you. Before you decide, here are some things to consider.
Evaluate Fees
The best secured credit cards charge an annual fee only. It would be nice if you could find a no annual fee card but these are rare. Digital Federal Credit Union, unless coming with an annual fee, but you need a $10 donation to the school to go to join the union. Most cards have secured an annual fee, but in general, it can be found at a price between $ 29 and 45 $. When the annual fee is more than $45, look elsewhere.
Beware of other charges as well as the security card. Some secured cards charge a monthly fee and additional costs. If an insured card claim no annual fees, look for the monthly fee (fortunately, without any guarantee DFCU fee). There are safe cards, additional fees of up to $75 if you have a $ 50 annual premium and $75 setup fee, which is $125, 125 if your credit limit is set to $100, you have exceeded more than half - from the initial cost.
Be sure that the issuer reports towards the Bureaus
the sole need to obtain a secured credit card is usually to help in building your credit. Therefore, it seems sensible to select a card that frequently reports the bureaus.
It is important to know whether the card issuer to inform, and also whether the card will become an unsecured card later. An unsecured card looks better in your credit history and enables your credit rating greater than a secured card details.
Be smart about interest
Next, the search for a low-interest rate. Many secured credit cards have relatively high-interest rates, but you can see some secured cards, such as DFCU card, have relatively low rates of approximately 11.50% to 13.99%. In most cases, however, you can expect to see an APR between 17.99% and 22.99% for most secured credit cards. If the secured card began to enter the annual interest rate of 25.99% range, you should think twice about this. There are many credit cards with the reputable guarantee that adequate demand interest. Again, however, careful with the credit cards, charge lower APRs, but come with some costs. Public savings bank visa guarantee is a good example of the card to avoid because of its cost. The minimum APR is 11.24%, but there is a $75 installation and costs charged when your credit limit is changed.
Understanding the deposit
Finally, pay attention to security deposit requirements. Some secured cards offer a credit limit that matches your deposit. Therefore, if you deposit $400, you can expect a credit limit of $400.There are credit cards that require a higher down payment to obtain a credit limit. Away from these fixed cards, especially if they charge high fees that deposit on top.
There are some credit cards, backed up by a more generous policy regarding security deposits. Depending on your credit rating, a secured credit card allows you to have a deposit up to $ 200 credit as the limit of $49. Of course, if your credit is particularly bad, you still have to put a total of $200 reached the limit of $200. Search for a card which makes allowances and may allow you to deposit more based on your lower limit.