My Favorite Secured Credit Cards To Help You Rebuild Your Credit
My Favorite Secured Business Cards And Why
Here is some information on WHY its a good idea to add a secured credit card to your credit building arsenal!
How does a secured credit card work, and why is it so good
for building/ rebuilding credit
Secured credit cards are the tool of choice for building credit. Mainly because of their easy approval process. Anyone who can come up with the security deposit can be approved for a secured credit.
Here are a few of the reasons banks, consultants and even credit repair companies use secured credit cards to help their clients build OR rebuild credit!
1. Guaranteed approval
2. Most don’t pull a credit report
3. Higher credit limits – unsecured credit cards for bad credit tend to have very low credit limits. They are good for credit building because they help you establish new (positive) lines of credit. But banks want to see how you can handle lines of credit bigger than $300-$500
4. Report to the credit reporting agencies.
5. A good way for clients to build a savings account. After a year of on time payments, they will make your account unsecured and return your security deposit.
6. Secured cards generally become unsecured after a year and the clients security deposit gets returned to them.
Can you be denied a secured credit card?
Yes. Not all secured credit cards are the same. Some of them do require that you have a certain credit score or belong to a certain group (such as those tied to credit unions).
Just because an institution offers a secured credit card, doesn’t mean they will approve you.
The Good thing is, MOST ARE guaranteed approval. Just make sure you read the terms and conditions!
How long does it take to build credit with secured credit cards?
You will see the impact a secured credit card has on your credit score almost immediately. And if you practice good spending and credit habits. Your credit score will continue to increase month after month!
How long should I keep a secured credit card?
You should plan on keeping your card for at least a year. In most cases (if you have been paying on time), your secured credit card will become unsecured after a year and your security deposit will be returned to you.
Choosing the right secured credit card for YOU
There are A LOT of secured credit cards available. Read the information on the card, be aware of :
- Interest rate
- Annual fee
- Fees charged – some of these cards have some hefty fees. From late fees, to overcharge fees. Some will even charge for reporting your payment activity (none of the ones we recommend do this).
Congratulations!
If you are trying to build or rebuild credit, a secured credit card is a step in the right direction! Check out our other articles on credit building to help you improve your credit fast. And don’t miss any of our live webinars! Bring your questions!
