Credit Secure credit cards
Credit secure credit cards are especially useful for consumers with poor or little to no credit history that are typically declined for unsecured credit cards. A secured card guarantees approval by the lending institution because, in effect, you are the one taking on the financial risk through your security deposit.
Think of a secure card as your credit line "training wheels" that allow you the benefits of owning a credit card while giving you the opportunity to build a history of responsible credit use with on-time payments. The small credit limits and security deposit requirements are there to protect you from getting yourself into the poor payment history that may have plagued you in the past.
Credit secure card credit limits are often set at the amount of the security deposit or some percentage of it so that you cannot charge more than your security deposit can cover. However, depending on your specific secured card, adding more to your security deposit enables you to access a higher credit limit, or if your payments are on-time and consistent, the credit card company may reward you by increasing your credit line without requiring additional deposits. Many secured cards increase the credit limit of your secured card after 6-12 months of responsible use and on-time payments.
Think of a secure card as your credit line "training wheels" that allow you the benefits of owning a credit card while giving you the opportunity to build a history of responsible credit use with on-time payments. The small credit limits and security deposit requirements are there to protect you from getting yourself into the poor payment history that may have plagued you in the past.
Credit secure card credit limits are often set at the amount of the security deposit or some percentage of it so that you cannot charge more than your security deposit can cover. However, depending on your specific secured card, adding more to your security deposit enables you to access a higher credit limit, or if your payments are on-time and consistent, the credit card company may reward you by increasing your credit line without requiring additional deposits. Many secured cards increase the credit limit of your secured card after 6-12 months of responsible use and on-time payments.
What is a credit secure credit card?
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A credit secure credit card works just like a regular credit card, with one crucial difference. As with an unsecured credit card, you can use the secured card to make purchases up to your available credit limit, and you will be charged interest against those purchases if you don’t pay your balance in full every month. However, the kicker is that a secured credit card requires you to provide up-front collateral – a substantial deposit of money – with the credit card issuer.
Often, this deposit will equal your credit limit on the card. This is why it is called a credit secure or secured card – the issuer has cash security against your potential debts. If secured credit cards require a deposit, why wouldn’t you simply use a debit card, and make charges directly against a checking account balance? The answer, plain and simple, is that debit cards won’t establish – or re-establish – credit history. Secured credit cards will.
Often, this deposit will equal your credit limit on the card. This is why it is called a credit secure or secured card – the issuer has cash security against your potential debts. If secured credit cards require a deposit, why wouldn’t you simply use a debit card, and make charges directly against a checking account balance? The answer, plain and simple, is that debit cards won’t establish – or re-establish – credit history. Secured credit cards will.
Secured Vs. Unsecured Line of Credit
If you need funds for your business, a line of credit is one way to obtain those funds. You can choose from a secured or unsecured line of credit. Each type of loan has different terms and agreements. The amount and interest rate you receive will depend on your selection. Check with several lenders before applying to ensure that you receive the most cost-effective terms.
How to close a credit secure credit card
Closing a secure credit card after a year or more of use may be necessary to move on to get other kinds of credit and also get the savings account security deposit returned to you. It is a good idea to try to see if the card can be left open and unsecured before seeking to close the account. However, some lenders will not do this so you may want to move on and get your deposit back. Fortunately, closing a secured credit card is relatively easy.
The Instructions
The Instructions
Call the credit card lender at the customer service number located on the back of your card or on your billing statement. Explain you would like to close the card and get your security deposit back. It may be a good idea to have the card entirely paid off before doing this. Otherwise, ask the company if they will apply your deposit to any existing balance and send you any remaining money due.
