A secured credit card is one that might require that you provide funds to guarantee the loan. Remember, a credit card is a loan, and if you have no credit, or bad credit, issuers might be reluctant to issue you a card. This is where a secured credit card comes in.
If you are willing to provide a security deposit as collateral, you can receive a credit card. If you make your payments on time, and if you show good habits, you will build your credit to the point at which it is possible to get an unsecured card. You will get your security deposit back, and you can use a “regular” credit card.
Home Trust Secured Visa Card – Even if you have had problems in the past, the Home Trust Secured Visa Card can help you. There is a minimum deposit requirement of $500, but you can provide as much as $10,000 for your collateral. Your credit limit is based on your deposit. You get your entire deposit back if you close your account and pay the full balance owed.
This secured credit card comes with an annual fee of $59, or you can choose to pay a monthly fee of $5 (adding up to $60 over the year). The AIR is 14.90%, which is reasonable, and the cash advance AIR is 19.80%.
Capital One Guaranteed Secured MasterCard – If you want to make sure that you are approved for a credit card, the Capital One Guaranteed Secured MasterCard can be of help. You provide security funds, and your credit limit is established accordingly. You pay an annual fee of $59, but it doesn’t cost you anything to add an authorized user.
This secured credit card comes with a 19.80% AIR on purchases and balance transfers. The cash advance AIR is also the same. You also get all the benefits associated with MasterCard, including Zero Liability fraud protection. You can use this card to build your credit so that you are able to get a different, unsecured card later on.
Home Trust Secured No Annual Fee Visa Card – If you are looking to build your good credit without an annual fee, the Home Trust Secured No Annual Fee Visa Card can be a good choice. The interest rate is a little higher, at 19.99%, but if you pay off your balance each month, that shouldn’t be a problem. You still have to provide a minimum security deposit of at least $500, however.
It’s possible to use a secured credit card to make all of the same purchases you would with a “regular” card, and Visa has the advantage of being recognized almost everywhere around the world. After a few months of showing that you are capable of using your card responsibly, you can use your improved credit to apply for an unsecured card and get your security deposit back.