Best secured credit card, 7 Tips you must know to get the best secured student credit card deal Guaranteed! Your possession and responsible use of a secured card or secured credit line creates valuable references for future use.
If you can’t obtain an unsecured bank card, don’t give up hope. Even with terrible credit or low income you can get a bank card and secured credit line. These cards are secured with collateral and are called secured cards.
Why A Secured Credit Card And Secured Credit Line?
Because lenders want to extend credit to make money. But they make money only if you repay. When you pledge collateral to secure the account, the bank knows that one way or another they will get repaid. Banks are strict and loan officers rarely approve questionable loans. If your income is low, or you have poor, or no credit, then you will probably not get an unsecured card.
But you may still qualify for a secured card or secured credit line. Even when you have borderline credit that qualifies you only for limited unsecured credit, you will get more credit if you pledge collateral to ensure payment.
The most popular collateral is, of course, a savings account at the bank that issues the card. This account secures the credit line on the account and cannot be used by the card holder unless he surrenders the card or exchanges it for an unsecured account.
Sometimes the bank will let you hold your deposit in a CD or Money Market account. For example, a minimum deposit of $200 to $500 may be required to get the secured card and the credit line may be only half this amount, or $100 to $250. You will probably be charged an annual fee for the card.
However, interest may be lower than industry average because the credit is backed by collateral (Your Money). Some institutions also charge an additional processing fee of about $50 to $75, which is usually refundable if the card is not approved. Other forms of collateral acceptable to a bank, may include stocks, bonds, or an automobile or boat.
Secured Credit Cards Normally Are Easy To Get, But!
If you cannot get a secured account on the strength of your collateral, then try to obtain one by recruiting a credit worthy co-signer. A friend or relative may co-sign, or you may offer payment for assuming the risk.
The co-signer guarantees to make good on any obligations you incur. It’s like sharing a card with the co-signer. The co-signer’s credit supports yours, since yours alone can’t. A co-signer assumes a big responsibility Don’t ask someone to co-sign for you if you can’t fulfill your obligations.
Are you are a student who could not obtain a credit card?
Perhaps your parents will include you on their account until you can qualify for your own. Some cards even offer special deals to graduating seniors as a way to welcome them to the credit world.
A secured card looks exactly like unsecured bank cards. Only you and the bank will know the card is secured.
Because secured bank cards are backed with a cash deposit, the bank cannot lose. That is why they accept poor credit risks. But the secured bank card or secured credit line can give you the convenience of a bank card when you otherwise cannot obtain one. Equally important, once you prove your creditworthiness with a secured-credit-card, you can begin to build the credit you need for unsecured credit.
With a good track record on a secured card! The lender may issue you an unsecured bank card in place of the secured one. This is known as a conversion feature. Why would the institution swap a collateral account for one that is unsecured?
Since your unsecured card will offer higher credit, the bank believes you will use it more often and build higher monthly credit balances, providing for the bank higher interest, higher finance charges and more transaction fees.
Debit cards also look like the ordinary Visa or MasterCard. When you use them, you do not receive credit, but the bank charges one of your accounts in which you have funds. The debit card allows you the convenience of a credit card while allowing you to keep your funds in a higher interest money market account.
Debit accounts are used like checking accounts. The big difference? It is easier to use a charge card than write a check, and some places accept charge cards but not checks.
If you have significant assets, but still cannot qualify for a account, then a debit card may be for you. Large brokerage firms, can set you up with a debit card if you open a money market account with them.
Don’t forget, your good track record with a secured credit card or debit card is not always reported to the credit bureau. Make it a priority to find those card issuers that do report your credit history to a credit bureau. And request that they do.
Do you have some capital, but poor credit, You may consider a debit card as another type of secured credit card.
Cautions abound with a secured card or debit card. For instance, you may have seen ads in national magazines or TV that guarantee Visa, MasterCard or other credit cards even if you have poor credit.
These companies, in most cases, merely take advantage of what you do not know: They will only issue a secured bank card. They usually collect a non-refundable processing fee to merely send the customer a secure card application.
Others only send a booklet or instructional sheet that explains secured credit cards. Save the $50 to $75 these firms charge. With the information you learned here, you can obtain secured cards on your own.
Where can you get a secured credit card?
Check with your bank first. Many banks offer these cards, and your own bank will be most lenient with you because they already have a banking relationship with you.
Explain that you want a secured charge card account because you realize that you may not satisfy their requirements.
This approach often works even if the bank is not actively seeking applications for secured cards. But do not be discouraged if your bank does not offer secured cards. Walk through the telephone book. Call the bank card departments of the savings and loans.Return from Secured Credit Card to Credit Card Debt Elimination!
Subscribe Today And Receive FREE Debt Elimination And Credit Secret Ebooks!