| Get a secured credit card if you have
bad credit, need to establish or re-build your
credit. Apply safely online. Secured cards can
be used as a stepping stone to a regular,
unsecured credit. Use your card to make purchases -
just having the card but not using it does not help
you build credit. Try to graduate to an unsecured
card as soon as you can by making sure all your
payments reach the company before the due date and
staying within your credit limit. The Pro of a
loadable or pre-paid credit card, is that you
don't pay interest. You may pay a small fee each
month, but the end result is you are spending within
your budget, and not building up a huge credit
debit.
Having a secured credit card can help you build
or re-establish your credit. After six months to
one year of on-time payments and careful use of your
credit limit, you may begin to get offers from
unsecured credit card issuers. Before accepting any
card, read the fine print carefully. Don't cancel
your current card until you receive the new one.
To obtain a secured credit card, you deposit
money in a savings account. Minimum deposits vary.
The account is frozen while you have the card. If
you fail to pay your credit card debts, the funds in
the account may be used to cover your obligations.
Some issuers pay you interest - up to 4.5% - on the
account.
Most secured credit card issuers will give you a
credit line equal to 100% of the amount you have on
deposit, but some will grant you credit equal to
only a part of your deposit. A few issuers offer
credit lines of double the amount you have on
deposit, a type of hybrid account where part is
secured and part unsecured.
Secured credit cards are issued with the
MasterCard or Visa logo-look and are used just like
unsecured cards. To the rest of the world, they are
just credit cards. Use them anywhere Visa or
MasterCard is accepted.
Some banks may increase your credit line
without additional deposits after you have paid on
time for several months. Other issuers charge a fee
for credit line increases - use caution when
accepting such a deal. |
Security
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