Credit cards have become very important to everyday life over the past few decades.
Today, you need to have a credit card for many tasks, including reserving a car or hotel room and making a purchase online. Many people do not qualify for an unsecured credit card due to lack of a lengthy credit history or credit mistakes made in the past, so they may feel that obtaining a secured credit card is their best option. A secured card requires a cash collateral deposit that becomes the credit line for that account.
Before making the decision of whether to get a secured credit card, here are some things that you should think about.
How Much Money Must I Deposit?
The amount of money that must be deposited for a secure credit card will vary from lender to lender. Some lenders have a minimum deposit amount as low as $300 while others require a minimum deposit of $500 or more. Because lenders have the ability to set their own terms, it is important to review several different secured credit card options to see which one has the best terms for you.
What Fees Will Be Assessed?
The fees that will be assessed for the use of the secured credit card will also vary from lender to lender. The best secured credit cards will have low fees, as this will prevent your balance from being inflated by numerous bank charges. The fees that will be charged for the secured credit card are required by law to be disclosed in the terms and conditions of the credit card agreement. Be sure to read all of the terms and conditions for the account so you will know what fees will be assessed and when you can expect them to be added to your account.
Will My Account History Be Reported To All Three Major Credit Bureaus?
One of the benefits of obtaining a secured credit card is that it can help you improve your credit history if you make all of your payments on time and use the credit card responsibly. Make sure that the lender that you choose reports to all three major credit bureaus so your credit history and credit score will reflect your activities with the secured credit card account. If you can prove that you can use credit responsibly with a secured credit card, it will not be long before you begin to find offers for unsecured credit cards popping up in your mailbox as more lenders begin to see you as creditworthy.