Secured credit cards are some of the most misunderstood financial tools of our time. Though lots of folks believe secured credit cards have been”much less” of a charge card as opposed to unsecured credit cards are, this could not be further from the reality. If you wish to know the cold, hard facts about the world of credit cards, we have some info you will need to see.
It’s NOT a Stigma
If you believe you’re be stigmatized each time you pull your secured credit card from your pocket, you’re being just a bit paranoid. When you utilize secured credit cards, the only people who know the card is secured would be you and the lender. The individuals that swipe your card won’t even understand that you’re utilizing a secured credit card.
You DON’T Want Thousands of Dollars
While it’s true that some people today open up secured credit card accounts with a deposit of more than one-thousand bucks, the fact is that you can get a secured credit card with a deposit of just a few hundred dollars to begin. Should you finally want your credit limit to raise and you aren’t yet ready for an unsecured line of credit, you can typically add money to a deposit amount in future installments.
It DOES Count On Your Credit Report
Some folks mistakenly believe that the companies that offer secured credit cards do not report account activity to the credit bureaus. This definitely isn’t the case. Your secured credit cards will show up on your credit file, as will your own repayment history.
People who believe secured credit cards aren’t documented are generally vexing secured credit cards with prepaid credit cards. Prepaid credit cards aren’t reported to the agencies. With a prepaid credit card, then you put cash on the card and if you use it, you use it. There’s absolutely no revolving credit line. This is quite different than how secured credit cards work.
Having secured credit cards, then you invest in a savings account that acts as a warranty for the revolving line of credit you are being issued. Each month you’re charged for the purchases you made to the card and you must make minimum monthly payments, just as with an unsecured charge card account.
Interest Rates Why are NOT Better
Many people today believe that secured credit cards offer much lower interest rates because the account is ensured by a financial institution account. This is not necessarily correct. With secured credit cards, the interest rates are usually in precisely the identical ballpark as they are unsecured credit cards (10 to 20% ( based upon the card).
Rewards ARE Available
In case you’re one of the many who consider that secured credit cards not have benefits programs or perks, you will be delighted to discover that is not the case. There are some secured credit cards that do indeed offer rewards programs, although you might need to pay a minimum yearly fee to sign up.
The Deposit IS Refundable
You receive one or two bonded credit cards and rely on them for around a year. Your credit is looking better and you’re now eligible for a unsecured credit card with much better conditions. You wish to close your secured credit cards, however what exactly happens to your security deposit?
If you send in a deposit for secured credit card, then it goes to a savings account and the money still belongs to you. When you shut that charge card, the money is sent back to you with all the interest that the savings account has got when the remainder of the card is paid in full.
Now you know the truth about secured credit cards, go right ahead and discover the card that is perfect for you. Remember, guaranteed credit cards might not be your dream card, but they’re definitely a means to that conclusion.