Benefits of Secured Credit Cards
Many people get a secured credit card each year. It is a great way to establish a credit history or get credit back on track. This kind of card usually only requires someone to have a checking or savings account. The credit card will function as a regular credit card; however, it is backed by a checking account. If someone is unable to pay their bill by the due date, then funds are taken from their checking account. This helps the bank to be able to get the money owed to them, while still helping the person to have the benefits of the card.
If someone has bad credit, then the secured card is a great way for them to show they actually can pay bills on time continuously. As someone continues to pay on their card, their credit rating will improve. Before they know it, they will be able to apply for a card that is unsecured. One great thing about the card is a person cannot get into debt with the card because they are only able to spend the amount they have on their account. It is advised to still use the card as responsibly as possible.
What To Consider When Applying For A Secured Credit Card?
When applying for secured credit cards, several things should be considered. One thing is the annual percentage rate of the card. It is best to choose one that has a relatively low-interest rate. The higher the interest rate, the more people will pay long term. The fees of the card should also be looked into. There is sometimes some fee charged to get started with the secured card. So, it is important to look for cards that either has no fees or lower fees.
One card always mentioned in the top secured credit cards is Wells Fargo. They are one of the most successful banks globally. They offer a twenty-five-day grace period before interest charges. Their annual fee is one of the lowest at only twenty-five dollars. Wells Fargo will do periodic reviews for their clients and will offer them an unsecured card if things are in good standing.
Capital One secured cards are another option for people who would like to get a secured card. Their fees can vary but are reasonable. Open Sky is another secured credit card provider. They have higher fees but if someone truly needs a credit card, it is a viable option.
All cards are not created equally. If someone has no credit history or their credit history has suffered, they should not feel ashamed. Credit is something that can be worked on. Many people can see a significant improvement in their credit in a matter of months. For some people, it can take a bit longer, but it does not take as some people may believe. It is imperative for someone to find the best-secured card that meets their financial needs. They have to understand if they do the right things regarding their credit, they will not need the secured credit card forever.