Secured credit cards can be a good option for building or rebuilding your credit. There are five benefits that stand out for consumers with blemished credit or no credit at all.
1.You can often get approved for a secured credit card when you can’t get approved for a traditional credit card. Paying the security deposit shifts the credit risk away from the credit card issuer.
2.They typically report to credit bureaus. Unlike a prepaid credit card which lets you make electronic payments just like with a credit card; a secured credit card will send your account history to the credit bureaus to be included in your credit report.
3.A secured credit card can help you establish or re-establish your credit. Since payments are included in your credit report, paying on time, and managing your balance will help improve your credit score. After raising your credit score, you may be able to qualify for a regular credit card.
4.Your security deposit is used only if you default on your payment. Unless your defaulted balance is more than your deposit, you will not get sent to collections for defaulting on your payments. Though the card issuer will keep your deposit, you do not have to worry about debt collectors hounding you for missed payments on the card. The late payments still will hurt your credit score.
5.You can earn rewards on purchases with some cards, such as Merrick Bank and Open Sky Visa’s secured cards. If you pay your balance regularly before interest charges accrue, this can help to offset the amount of your security deposit.
1. Merrick Bank Double Your Line® Secured Visa® Credit Card
2. The First Progress Platinum Elite MasterCard® Secured Credit Card
3. Capital Bank – Open Sky® Secured Visa ® Credit Card
4. First Access Card (Unsecured Card)
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*Individual results may vary. Please call for more details and to discuss your own individual situation.