Secured and Prepaid Credit Cards

Over the last month or so I’ve done a whole series of posts about secured credit cards. We’ve looked at their requirements for approval, their fees, their interest rates, and the benefits they have for people trying to rebuild their credit. You can sum up our conversations about secured credit cards this way: they will help you rebuild your credit score or establish credit history, but it’s going to cost you in the form of security deposits, relatively high interest rates, and fees.

To wrap up the series I wanted to use at least one post to discuss prepaid credit cards. Secured and prepaid credit cards have some things in common, but they also have some big differences.

What is a Prepaid Credit Card?

A prepaid credit card is basically a charge card. What does that mean? It means you open an account with a card provider and you deposit a certain amount of money into that account. The card provider gives a card with a credit card logo on it that acts just like a credit card. You can use it to buy things online, in stores – pretty much wherever credit cards are accepted.

But here’s the big difference between a normal or secured credit card and a prepaid credit card. When you use a prepaid credit card you’re actually using your own money. That’s different than a secured credit card because secured credit cards are actual credit cards with interest rates; they’re just secured by a cash deposit you made when you opened the account.

There are a few misconceptions about prepaid credit cards. One is that they help establish or rebuild credit. It’s not true. Prepaid credit cards don’t help your status with the credit bureaus because the card providers don’t have anything meaningful to tell them. Think about it – what would they say? “He successfully spend his own money until it ran out.”

I guess if you look hard enough you may find a prepaid card that reports to the credit bureaus, but it will be tough to find one.

The other downside I see in prepaid credit cards is they have fees. They’ll ususally charge between $5 and $10 to open the account and then there may be ongoing fees just to keep the account open.

What’s the Upside?

I’m actually not sure there is much of an upside. The only time I can think of that you’d be wise to open a prepaid credit card would be if you can’t get a checking account with a debit card. In that case it may be worth it to open one.

Wait – there may be one more circumstance where you might want to have a prepaid credit card. If you’re a person that has some fear about online shopping with one of your own credit cards or your debit card, a prepaid card gives you a credit card number to use on ecommerce and other shopping sites without having to worry about someone stealing your card and charging big purchases to it.

Secured Credit Cards are the Way to Go

I’d recommend that instead of opening a prepaid credit card, get a secured one instead. Your cash out of pocket will be basically equal, but the secured credit card will help you on your way to improving your credit score.

Get Free Secured Credit Cards

I have to be honest here. I’m not sure what you’re even talking about.

Are you looking for free secured credit cards as in those that don’t have an annual fee? Or are you looking for those that don’t have any monthly fees? Or are you looking for one that doesn’t charge interest?

Since I’m a little confused I guess I’m just going to have to answer all three questions and hope you’ll find what you’re looking for.

Credit Card With No Annual Fee

Let’s start with a list of secured credit cards I found that don’t charge you any kind of fee just for opening the account:

• GTE Federal Credit Union
• Amalgamated Bank of Chicago
• Suncoast Schools Federal Credit Union
• Orange County Teachers Federal Credit Union
• Municipal Federal Credit Union
• Digital Federal Credit Union
• The Golden 1 Credit Union

*Note: I found this list on bankrate.com. The list they provide shows that for the most part, credit unions usually don’t charge annual fees, and banks usually do. Just something to keep in mind.

Credit Cards With No Monthly Fee

Well, I can’t seem to find any secured credit cards that do have monthly fees. Apparently the majority of them don’t charge a monthly fee for keeping the account open, but I know some of them do. The fees are usually between $4.95 and $7.95 per month. You might say to yourself “That’s not so much.” Well, guess what. That’s exactly what they want you to think. Make sure when you’re considering different offers to watch for that montly fee. There couldn’t be anything worse than a card that charges and annual fee and a monthly fee to keep the account open.

0% Secured Credit Cards

C’mon folks, let’s be reasonable. Why in the world would a credit card provider ever do that? You might as well hope for the government to stop making us pay taxes. It’s not going to happen. Would it be great? Of course it would. It would also be great if John Elway came out of retirement to lead my beloved Denver Broncos to another Super Bowl championship. We might as well push those thoughts from our heads.

Instead of hoping for the credit card companies to start giving away free money, find the best card you can with low fees and a reasonable interest rate and then use it wisely.

Go Broncos.

Why Should You Establish Secured Credit Cards?

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I think the bigger question is Why should you have credit cards at all? Think about it. What is the point of using a financial tool when all that tool does for most of the people that use it is get them into high interest debt? Debt from which most of them never recover? Let’s cover that before we cover why you should establish secured credit cards.

Credit cards are a curse for a lot of people out there. They opened a few when they were in college (because filling out the application got them a free tee shirt) and they ran up some balances. Maybe they got those balances paid off while they were in college, and maybe they didn’t. Then they graduated and nailed down their first job.

With that first job came some kind of salary, and with the salary came the belief that they could ‘afford’ nicer things than what they had during four years of poverty at school. So they get higher limits on their credit cards and they buy nice furniture, new clothes, etc. Now they probably have balances that will take years to pay off, if they ever pay them off at all.

In my line of work I talk to people about their credit cards a lot. One thing I hear is “I made some mistakes with credit cards in college so now I refuse to use them.” What? These people are basically saying “I’m an undisciplined slug that can’t handle a credit card so I have to hide them in a safe deposit box.” C’mon, people. Do you use the credit card or does the credit card use you?

Credit Cards Should Be Your Best Friends.

Let me just give you two examples of why you should love your credit cards:

1. Rewards and Sky Miles. It is my mission in life to find ways to use my skymiles card. Nothing makes me happier than flying to fun destinations with my wife and letting the credit card company pick up the tab. I recommend opening a card that doesn’t cap the number of miles you can earn. Also make sure the miles never expire. It may take time to get enough miles to earn that free first class ticket to Europe.

If you’re not into traveling much, get a credit card that rewards you with cold hard cash. 1% back isn’t much, but it’s money for dinner and a movie.

2. Buying advertising for a business. I’ve had a busines online before that allowed me to spend as much as $1000 per day on advertising. Trust me, at the time I didn’t have $30,000 per month in my bank account to buy that advertising. Luckily I had opened a credit card with skymiles and I put all of my ad costs on it. I was able to make a healthy profit thanks to all that advertising, and I got a few free plane tickets out of the deal as well.

So Why Establish Secured Credit Cards?

One simple reason: secured credit cards open the door for you to be able to do the things I just talked about. If you’re in a position where you’re looking for secured credit cards, it probably means you can’t qualify (yet) for a great credit card with rewards. Use a secured credit card to open that door for yourself.

No Fee Secured Credit Cards

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Fees. Business owners dream of being able to charge them, customers will do almost anything to get out of paying them.

Why do businesses charge fees? Of course the simple answer is they want more profits. There’s more to it than that though. The reason for fees has more to do with a business minimizing its risk than anything else. A lot of you are looking for no fee secured credit cards. It annoys you to think you’d have to pay anything up front for the privilege of using a credit card. You might say “What does charging stupid fees have to do with minimizing the risk a business faces?” Well, I’ll tell you. And you’ll be surprised you at how reasonable the concept really is (from the credit card companies’ point of view, anyway).

As an example, let’s look at credit card providers. They’re in the business of giving you unsecured (read: risky) lines of credit. Then they have to wait for you to buy things with those credit cards (and who knows if you ever will), and they have to hope you don’t pay off whatever balance you ran up during the month (if you don’t then you got to use their money for free). In other words, a lot of things have to go right for a credit card company to make money off you.

But while they’re waiting for you to spend money you don’t have, and carry that balance month to month, are they incurring any expenses? You bet. Think about it – marketing costs for those TV commercials and all the junk mail they send you. Then when you respond to an offer the sent you in the mail they have to pay people to process those applications, people to answer your questions when you call in to ask when you’re new card will arrive, people to manage the people on the phone, leases on buildings, the list goes on.

That’s a risky venture for the card provider – they might spend a few thousand dollars on you before you ever give them a penny of revenue. And what if you never spend the money or carry the balance? They’re out of luck, and out a few thousand dollars.

So here’s what they do. They look at patterns. They know that for every 1000 pieces of junk mail they send out, a certain percentage of people will respond and apply. Of the applicants, a certain percentage will be approved. Here’s where the fees come into play. At this point if the credit card company could charge $39 or $79 to every person that got approved, they’ve recovered a big part of the upfront cost of acquiring you as a card holder.

It may not stop there. With a lot of secured credit cards they charge a monthly fee just to keep the account open. By now, you know why. It’s just a way to make sure they make at least some money off you in case you’re not using the card they gave you and paying outrageous interest. It’s the same revenue model as so many subscription-based websites we all pay $9.99 or $14.99 per month for.

All that being said, in many cases the competitive nature of the credit card industry has forced them to stop charging such ridiculous fees. Most of the credit cards you apply for won’t require you to pay any fees at all. So, when you get ready to open any kind of credit card, make sure you’re getting something excellent in return for any fees you pay.

Guaranteed Secured Credit Cards

In the financial world the name of the game is return on investment. I read (okay, I only started reading) a book written by one of Warren Buffet’s two mentors. His name was Benjamin Graham and you could sum up his whole investing philosophy by saying this: “Find investments that offer safety of principle and a reasonable rate of return.”

With this in mind, the credit card companies are very careful about who they issue credit to. They don’t make billions in profits every by throwing their money around willy-nilly to anybody who just walks in and says sign me up. The reality is most people wouldn’t offer “safety of principle and a reasonable rate of return.”

Two of the biggest indicators the credit card companies use when evaluating you are 1) your credit score, 2) your credit history. This is how they judge whether you’re going to pay them back their money or not.

If you have a low credit score or not enough history, you’re not going to get approved for a standard, unsecured credit card. That means a secured credit card is the way for you to go.

To make the start of you credit-building journey as easy as possible, you should be looking for guaranteed secured credit cards. What do I mean by that? I mean you should only apply to credit card companies that offer guaranteed approval. After all, you’re putting down a big security deposit, which means their principle is complete safe and they’re going to make a reasonable rate of return off you. There’s no reason not to approve you.

Is it possible to Get Guaranteed Approval on Non-Secured Credit Cards?

The short answer is no. If you think about everything we just talked about as far as risk and reward for the credit card companies, you realize it would be corporate suicide for them to hand out a credit card to anybody and everybody that wanted one. A lot of those applicants aren’t credit worthy, and they wouldn’t repay their balances. We can’t have that can we?

If you want an unsecured credit card there’s only one way to get it. You’ll have to have some credit history and at least a decent credit score. They may start you small, but if you can get approved for even a small limit it will help you prove yourself to the credit bureaus and soon you’ll be to get as much credit as you want or need. Depending on your discipline and habits, this might be a blessing or a curse. Until your credit is back on track you’ll find that this type of financing – guaranteed loans for bad credit no fees – is really your only option.

Secured Credit Cards With An Interest Bearing Account

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If I ask you to name the number one concern with owning and using credit cards it will take you about half a second to say “high interest rates.” It’s everybody’s worst nightmare right? Run up a balance on your credit cards and then you’re paying them back until three weeks from never. That’s why so much fear and hatred is associated with credit cards and the credit card industry.

Well I don’t hate credit cards. I love them; my business couldn’t survive without them. Have I made my share of mistakes with them? Of course. But you have to learn from your mistakes and move on. Just think if the cavemen had given up on fire after they got burned for the first time. Hot Pockets would be Cold Pockets, and I can’t bear the thought.

So let’s talk about this issue of interest and credit cards, and let’s focus it on those of you who are in the credit building or credit re-building phase of your life, because I want you to be looking for secured credit cards with an interest bearing account.

Those of you unfamiliar with secured credit cards probably need a little background. Secured credit cards offer people a chance to rebuild their credit or establish some credit history without putting themselves or the credit card companies at much financial risk. The risk is removed because the credit line (whether it’s $100 or $10,000) is completely secured by cash deposit the applicant makes into an account owned by the issuer of the credit.

By having this deposit in place, you’re assured against ever running a balance you can’t repay, and the issuer gets to sleep well at night in his giant corporate bed knowing you won’t leave him holding the bag on a big, unpaid debt.

Let’s assume you pay the balance on your new credit card every month (I know you wouldn’t think of doing anything else). That means you’re not paying any interest to your credit card company. But what about that security deposit you made? Is it just sitting there earning no interest for you? I hope not, because the bank is definitely making money off your cash.

If they’re going to make money off your cash, then you need to get paid too. That’s why I’m trying to teach you how to earn interest on secured credit cards.

When you start shopping around, make sure you look for companies with low or no fees, reasonable interest rates, and above all, look for companies that will pay you 2% or 3% on your deposit.

Think about it. If you’re paying your balance and earning a couple percent on the money you’ve deposited, then who’s coming out ahead? You are! (Of course, they are too. Remember, they earn a lot more than 2% on your money. But hey, it’s better than nothing.)

It’s a win-win-win. You’re building good credit history and earning a little interest on a savings account, and they’re earning billions of dollars in profits each year. I love capitalism.

Secured Visa Business Credit Cards in the Bahamas

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“There is a reasonable basis for believing that some people are using offshore credit cards to help them evade paying U.S. taxes.”

You really gotta love the government. I took that quote direct from the IRS website. They might as well say “There is a reasonable basis for believing that the sun will rise tomorrow.”

You may not have known you could get credit card in the Bahamas, but you can. All you conspiracy theorists need to brace yourselves for what I’m about to tell you. The government is not only going to come after you if you have offshore bank accounts; they’re going to come after you if you even have an offshore credit card.

I have no idea how you’d scam Uncle Sam out of his precious tax dollars with the use of a humble credit card. I’m sure I could find out with a couple quick google searches, but check this quote out from our friends at the Internal Rip-off Snakes:

“On March 27, 2002, a federal judge in San Francisco issued an order authorizing the IRS to serve the John Doe summons on VISA.”

What does that mean? It means they got a judge to order Visa (and, as it turns out, Mastercard and American Express) to open their database to the tax hounds so they could sniff out folks using offshore credit cards to evade taxes. Is nothing sacred?

I’ll let you sort out your own tax avoidance plans, but let me give you some tools to carry out your diabolical scheme.

Scotiabank MasterCard Business Card

Scotiabank is one of the leading banking and credit card providers in the Bahamas with branches throughout the islands. I could only find two business credit cards they offer, both are master cards, and neither one is secured. The terms of the offer are pretty standard, and the Bahamas keep their dollar equal to the US dollar so you don’t have to do any guessing about conversions for your limit or balance.

Royal Bank of Canada

This is a prominent Canadian bank offering Bahamians these options for credit cards:

• Visa Classic
• Visa Gold
• Mastercard Classic
• Mastercard Gold

You’ll find standard terms and rates apply with these cards. I hope I’ve shown you that whether you’re traveling or trying to sneak around those pesky taxes, the Bahamas have the financial tools you need.

Secured Credit Cards in the UK

Safe to say that people are people right? I mean, whether you’re talking about folks in the USA or the UK, we all have characteristics in common. One trait we all seem to share is impatience. You know, the desire for instant gratification. We’ve al heard the saying “Why put off till tomorrow what you can do today.” How about the 21st century edition of that saying: “Why save up for the things you can buy with credit cards today.”

I’m kidding, but only a little. People around the world are able to satisfy their appetite for NOW because of the proliferation of credit cards. It’s no different in the United Kingdom than anywhere else. You’re going to find people looking for secured credit cards in the UK as much, or more, as you do in the United States.

Credit card offers and terms in the UK are very similar to those in the US. They’ve legislated laws to ensure that credit issuers are completely truthful in explaining the terms of their credit agreements. Interest rate and annual fees will also be similar, and so will credit limits.

Unfortunately for some, credit card companies in the UK are just as careful about who they extend credit to. If you’ve committed financial sins in the past, or if you haven’t established much credit history, you probably won’t be able to get a normal credit card. For you, the best way to go will be no fee secured credit cards in the UK.

There are plenty of companies in the UK offering secured credit cards. Here’s a short list:

• Capital One
• FirstPlus
• Vanquis
• Aqua Card
• Cash Plus Mastercard

These cards won’t be dissimilar form those in the US. You’ll have to secure your credit line with a cash deposit, you’ll probably pay a fee to keep the account open, and you the interest rate will be high. Hang in there though. Over time your credit rating and history will improve to the point that you’ll be able to get a normal credit card and my research tells me that’s not such a bad thing. For starters a lot of the UK credit cards I’ve searched for seem to have an initial 56 day grace period (as opposed to 25-30 on cards in the US). Not a bad deal at all. I’m sure we’ll talk more about that in the future.

Compare Secured and Unsecured Credit Cards

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The credit card industry is one of the biggest, most competitive, and most profitable out there. Credit consumers today have more options than ever and there are a lot factors t to evaluate. One of the first questions is whether to get a secured or unsecured credit card. Some people may not think the choice between secured and unsecured credit cards is a tough one, but it’s not as simple as you might think. There are several angles to consider, but first let’s look at the basic characteristics of both types of credit cards.

Secured Credit Cards

Easy approval, often guaranteed. Great for building credit score and history, or rebuilding after bankruptcy.Requires a security deposit, usually equal to the amount of the credit extended. Often carries a monthly fee to maintain the account. Typically charges high interest rates on purchases, 21% and above.

Rarely offer balance transfers.

Unsecured Credit Cards

Approval based on credit worthiness (score and history). Good for improving your credit if you use them wisely. No security deposit required, limit determined by credit card company (depending on credit score and household income). May or may not charge an annual fee to maintain the account. Cards with rewards such as sky miles often carry annual fees. Interest rates on purchases can range from 9.9% to 21% or more. Often offer balance transfer options with promotional interest rates. It’s obviously easier to get unsecured credit cards with fair credit, and you’d probably rather not have to put down a security deposit.

Basically, unsecured credit cards are the better tool in the long run, but that doesn’t help those people that have bad credit and need some credit now. My advice is that people should get unsecured credit cards with low rates, no annual fee, and a rewards program if possible.

If it’s not possible to get an unsecured credit card, shop around for the best possible rates and try to avoid fees whenever possible. Use the secured credit card wisely for several months and soon you’ll probably get offers from companies for the unsecured variety.

When you get those unsecured credit card offers, look for one with a well-known company and one that offers a low or 0% introductory interest rate for at least six months. That way you get the benefit of using their money for ‘free’ until the promotional period ends. Make sure you pay the balance monthly!

International Student Credit Cards

For a lot of foreigners, the Amercian Dream begins with college. More and more universities are accepting foreign applicants to improve the diversity of their campuses, and like it said in Field of Dreams, “If you accept foreign students, they will come in droves.” I think that’s what it said anyway, or something very similar.

So what is life like for a college student freshly arrived from Canada, China, India, or Europe? They have to get used to a new culture, a new currency, a different language (although most of them probably come to this country with a working knowledge of English), and they have to get accustomed to the business and financial practices of the United States. Depending on their country of origin, the way our financial systems work may be completely different.

And what is it that makes our financial world go around? Two things: savings tools and financing tools. This blog doesn’t deal much with the investing side of money, so let’s talk about how a foreign student can break into the world of American debt. The way for them to get started is with international student credit cards.

It’s not going to be easy for most international students to get credit cards. First of all, they will come to the country with no credit history or credit score in the eyes of the American credit bureaus. That makes them a big risk in the eyes of any credit card provider.

Since most foreign students will be viewed as a risky client for the credit card companies, the best way to go may be with either a prepaid or a secured credit card.

My preference would be for the student to get a secured credit card, because the provider of that card is more likely to report consistent use and payments of the credit card to the credit bureaus. After several months or a year of positive reports the foreign student will start to establish the credit score and history they need to get better credit cards (as in higher limit and lower interest rate).

Here are a couple credit cards I found that are available to international students:

American Express Blue Credit Card for Students – many international students have been able to establish their first unsecured credit card with American Express. It offers some great benefits as well, with discounts on airfare, no annual fee, and a couple of hours of free long distance phone calls. And don’t forget the snob factor of owning an Amex.

Chase Platinum Credit Card for Students – Chase seems to approve a relatively high percentage of first time foreign applicants. Also, Chase won’t charge you an annual fee if you get this card and they’ll provide fraud protection on the card as well.  You even get to choose from four designs.

Secured Credit Cards for People With Bad Credit

Everybody goes through rough patches in their financial life. Sometimes there are circumstances that lead to getting behind on your bills, missing a few payments to your debtors. All kinds of things can happen that make it impossible for you to keep up. It could be a layoff or a slowdown at work. Lots of people have unexpected medical bills or car repairs they weren’t planning on. Cash starts to get tight, you have to make tough choices about which bills to pay and which to ignore. The worst case scenario happens and you miss a couple mortgage payments. Why can’t the credit bureaus just let a few slider right? Wrong. Just one or two 30 day or 90 day lates on your report can wreck your score. I guess a credit score is kind of like trust. Have you heard the saying? It takes a lifetime to build trust and only five minutes to lose it. You’ll understand what that means when you don’t send the mortgage check a couple of months in a row.

Luckily, these little financial slip-ups are temporary for most people. Your job will pick back up or you’ll find a new one. Pretty soon you’re sending all the checks in on time and you’re sleeping a little better at night. Once you get your finances in order again you’ll want to get your credit rating back on track as quickly as possible. One solution is secured credit cards for people with bad credit.

Credit card companies and banks are wary of anyone that has missed payments in the past; they think you’ll miss payments again. They don’t want to lend money that’s not going to be repaid. In other words, your good intentions aren’t enough for these guys. Go figure.

Rebuild with Secured Credit Cards

So here’s what you do – remove their risk. They’ll give you a credit card as long as you put something at stake – your cash. Show them you can handle a little piece of plastic with a logo on it, and if you consistently use the card and make payments on time you crawl out of the hole you got yourself in. That’s the best way to use secured credit cards to rebuild very bad credit.

It’s probably not a bad idea to open a few of these cards, and use them for your every day purchases – gas, groceries, clothes – the credit companies will like the fact that you’re handling the credit well.

Low Interest Secured Credit Cards

Many people are looking for low interest secured credit cards to get themselves back on track. I understand why any person would want low interest rates, but at the same time I think it is kind of funny that you are entertaining paying interest rates on a credit card and missing payments after going through so much trouble and struggle with a credit card to begin with. It is almost saying I know that I am going to get punched in the face again, but then asking “Please, just not in the nose.”

My feeling is that I would look to make sure that you have a couple other requirements then just finding low interest rates. One of the best things that you can do is take the time to look at the issuing bank and how credible they are. Do they have a good history with credit bureaus?

You can contact credit bureaus and the Better Business Bureau to find out if they have an impressive history or not. Beware of low interest secured credit cards online, not all are legit just because they have a low interest rate. This will allow for you to find out if they report to the credit bureaus with your history with their cards and in turn will allow you to have a higher credit score if you take care of your payments on time.

Next I would be more concerned about application fees, processing fees, late fees, deposit requirements and any other type of fee they may make up. This is so important because this is really how a company can make a lot of money off of you even if you take care of your card payments. Some companies charge up to $200 or more just to get started and then more fees monthly or annually. This can take its toll on any person with bad credit.

With deposits you are going to be required to make an initial payment between 10% and 200% of the credit you will have available to use. For instance, say if the issuer decides you have to make a 100% deposit, then if you have a credit limit of $1,000 you are expected to make a $1,000 deposit. Some can be greater than that. It becomes kind of silly, but there will be a price you will have to pay in order to turn your credit around.

Usually I have seen rates between 10% and 20% on a usual secured credit card. You may see lower, but I suggest that the lower the interest rate is with your secured credit card then the longer you should read the terms and conditions. The rates on low interest secured credit cards can leap drastically after six months or one year. Some will have an accruing interest rate that you don’t have to pay off until six months. These are all techniques that are done to allow for you to have time, but also can cause you to procrastinate easily and find yourself in a terrible position financially after several months.

I suggest that you are careful about your choices. You are better off getting a card from a well known bank with higher interest rates then low interest secured credit cards online. Some don’t have credibility and honestly aren’t looking out for your best interest. No pun intended.

Secured Capital One Credit Cards

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One of the best ways for any person to restore their credit is by getting a secured credit card from a reputable bank. I have to say that one of the best issuers out there is Capital One. There are some concerns that critics have brought up about secured Capital One credit cards, but there are plenty of people out there that have strong relationships with Capital One. They are definitely worth your time to take a look at.

Capital One is a Virginia-based bank founded in 1988 by Richard Fairbank and Nigel Morris. They are well known for their innovative strategies with their products. They are the fourth largest customer of the United States Postal Service. They recently merged with North Fork Bank for $14.6 billion dollars. They have moved up quickly because of their diversity with specializing in many different forms of consumer lending such as credit cards, home loans, auto loans, banking, and savings products. Their diversity has paid off well, as well as their impressively catchy commercials. Many people recognize their slogan, “What’s in your wallet.” Capital One continues to go against the trend by being a “monoline” lender (only consumer lending) and then going into retail banking.

There are some concerns with Capital One about that even though they have been very successful. Their stock has been flat for the past half decade and there is speculation that they will be bought up by larger company. This shouldn’t hold you back from getting a secured Capital One credit card because even if it is bought up, that shouldn’t hurt your credit or your contract. Sometimes that might result in better rates and fees.

Whether you are getting Capital One secured credit cards in Canada, America, or wherever they are often criticized for offering multiple cards to people with poor to no credit and that can be a huge problem with numerous maxed lines of credit and late payment fees escalating. Some consumer advocates consider this to be predatory, but obviously you have to decide how you spend your credit cards. Capital One and no other bank will force you to spend your card, so that point tends to be less valid to me.

A point that is more valid to me is that Capital One will not disclose their customer’s total credit limits to credit bureaus, but they will mention the spending habits of customers and what they do with the cards. This is unfortunate because the FICO score is determined by the limits extended to a credit card consumer compared to the amount of credit used. In turn this can hurt your FICO score. So that is a concern that you should pay attention to.

So look at other options that you may have, but be willing to get secured Capital One credit cards if you are looking for nice small limits that you can use to temper your expenditures. This might be a good initial step and if you do get a Capital One card then look at another big bank like JP Morgan Chase to get a card that will be more easily recognized for your FICO score.

Sterling Bank and Trust Secured Credit Cards

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From time to time it’s worth taking a look at an individual credit card company with regards to what they offer the credit consumer. Today we’re reviewing Sterling Bank and Trust secured credit cards.

Sterling is a big name in banking; they’ve been around for a while now and our research tells us they’ve done a pretty good job. First a little background about the company. Sterling has been around since 1984 when it was focused mostly on mortgage and lending services for homeowners. As the bank thrived and grew, it expanded into commercial real estate lending and other credit services. The bank originated in and now has offices in Michigan and several in California. In addition to credit cards, Sterling offers its clients checking, money market, and savings accounts along with business services and certificates of deposit.

Thinking of going to Sterling Bank and Trust for secured credit cards? It’s probably a good idea. We looked around for reviews and people had good things to say about the company. One reviewer on epinions.com had only good things to say. Her story is probably similar to a lot of people out there, maybe even you. She said she and her husband had always struggled with bad credit and had a hard time getting approved for credit cards.

Her husband saw an ad for the Sterling Bank secured credit card, they decided to get it, and it’s been only good things since then. Here’s a summary of a few of her favorite parts of the card:

1. She didn’t have to worry about getting approved – they’ll approve virtually anyone with some money for a deposit.
2. The card is helping them improve their credit.
3. She didn’t have to worry about falling behind or spending money she didn’t have because the only money on there is secured by her deposit.
4. She didn’t have to wonder or worry about what her credit limit was – she set it.

As an added benefit, you can use your card in other countries, with only a few exceptions. They’ll also let you Western Union money to your account if you happen to be close to your payment deadline and it’s the only way to get your money there on time.

The only con our reviewer mentioned was having to wait a long time to receive her card, because the company didn’t offer rush service. I’m guessing she had to wait the standard four to six weeks for the card to arrive.

The Sterling Bank and Trust Secured Credit Card passes our review with flying colors. This is a good tool to help you move your credit in the right direction without putting yourself at further financial risk.

Secured Chase Credit Cards

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A Secured Chase Credit Card is one of the best types of cards you could get. Chase is a well respected company that is I suggest that you use because of their track record and long running history. They have allowed for many people to overcome bad credit issues that have hurt them in the past. I can think of plenty of people that I have encountered that have struggled through credit and have struggled when it comes to getting mortgages, loans, or using their credit in any manner to achieve their dreams and goals.

Many people ask if secured credit cards are bad for your score and a secured Chase Credit Card is a perfect example of proving this notion incorrect. I have seen plenty of unknown establishments on the Internet that are offering money or lines of credit, only to find out they just might as well be hard money lenders instead of stating themselves as a bank. These companies are finding ways to nickel and dime you to death with application fees, transaction fees, processing fees, and a billion other types of fees that can be made up out there. These are just doctored ways to make more money in every possible way. It is the beauty of capitalism in the United States of America.

You don’t have to pay a lot of these unnecessary fees with a company like Chase because they don’t need to nip at you a dollar here and a dollar there. JP Morgan Chase is one of the oldest financial service firms in the world. They have over $1.4 trillion in assets and currently they are the third largest financial service provider in the United States. They merged with Bank One in the last couple years and brought over Bank One’s solid CEO Jamie Dimon. You should take that into consideration that they probably have no reason to destroy trust with you as a customer because your money is not worth nearly as much as their credibility and reputation with you and other customers that they have.

Chase has some of the best secured and the best partially secured credit cards for a middle class Joe to find a chance to regain their trust with credit bureaus. You are not going to have to worry about whether they will report to the credit bureaus or not. You don’t have a trillion dollars in assets without building trust with credit bureaus over the years and treating your customers the right way.

This shows us why it is so important to know who is providing you with the card and the issuing bank. Any one can get a Visa or MasterCard logo, but that doesn’t mean that you have the best bank for you. This is worth your time to go out and make sure that you have a quality bank like JP Morgan Chase to help improve your credit and leverage yourself in the proper manner.

The Best Way To Pay Off Secured Credit Cards

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A secured credit card can be a touchy thing. You definitely need to make sure that you pay your bills. Many people don’t know much about the best way to pay off secured credit cards or sometimes even how to get them.

This is a great example I have here for so many people to get into the habit to start spending their credit cards the right way. I am going to talk not just about paying off the secured credit cards, but more importantly how you should spend on these cards. I have a story from a friend of mine that has been through a lot and has struggled to get his credit turned around. It took him some time and this is his experience:

I had such a horrible time using my credit cards correctly. I struggled to know how to do it right. My spending habits were pathetic. I couldn’t make payments because I was spending so much more than I could afford. It was difficult for me to pay off my debts.

First, I couldn’t pay off any debts and I started building up interest. It continued to multiply and then I couldn’t even pay the full interest any more and the principle wasn’t even a thought. It got so bad that I had to stop my credit cards. I had to drastically change my spending habits and pay off so much debt.

My credit was in the can, but I wanted to get a business going. I spent so much money on consumer debt that was just staying there doing nothing and hurting my score. I started to realize about leveraging capabilities. There were people that would spend so much money and more than I was, but they were using that money to make them money. I realized this from a friend that was sporting the American Express Black card.

Well that type of a card was out of my range. So I had to look at a secured line of credit that was out there that I could get my hands onto. I found some business partially secured credit cards that were quality interest rates and not a lot of application fees that I knew would be a pain in the neck if I didn’t take care of it. I started using these cards wisely for the first time in my life. I thought to myself each time and for the first time, ‘Should I pay for it or can I go without it?’ Finally, I found myself spending more wisely.

This friend of mine has improved his credit gradually and found out the best way to pay off secured credit cards. Be careful what you buy. One of the worst things you can do is spending too much and assuming that you will be able to pay it off. It is never that easy. You never realize what other bills may come up or other emergencies you may have. Play it safe and create more streams of income so you can spend lavishly, but within your means.

Secured Credit Cards for a Small Business

Credit cards can be a business owner’s best friend. They make it possible for you to pay your monthly expenses without having to drain all your cash. Not to mention you can earn rewards like sky miles just by running your normal business costs through a credit card. But what if your business hasn’t established much credit? Or worse, what if you had some credit cards, but you fell on tough times and your credit was damaged?

Secured credit cards for a small business can be the solution. These cards offer the same credit building benefits of secured credit cards geared towards individuals, but there are some differences.

A good example I found is the Wells Fargo Business Secured Credit Card. Here is a general outline of their offer (taken from their official site):

You can get up to $50,000 in credit extended to you as long as you have an equal or greater amount deposited with the bank.

The interest rate isn’t too high; 9.9% on purchases you make (pretty good considering I’ve seen some with interest rates as high as 24.99% on purchases).

Wells Fargo will even pay you 2.5% on your security deposit for the first year you have the account with them, but after one year it drops to 0.5%

I looked for other offers for small business credit cards secured by deposits, and I couldn’t find too many. Why do you suppose that is? Here are a few ideas I came up with:

Applicants probably won’t have enough cash on hand to put down a big deposit. The deposit is something the credit provider can earn interest on, not to mention it allows them to give higher lines of credit, which pays them higher fees.

The see business that need secured credit cards as too much hassle to work with. Think about it, most businesses fail anyway right? Why would they want to provide a line of credit to a small business that either has no credit or has had a bad experience with credit in the past? Better to offer credit cards to established businesses that will keep the card open for years to come.

Secured credit cards must not be as profitable. After all, we’re talking about credit card companies here. They go where the profits are.

Based on my research, I’d say the Wells Fargo Business Secured Credit Card is the way to go.

Secured Credit Cards in Canada

We share the same language, the same name for our currency, we even share a few professional hockey and basketball teams. Why wouldn’t we share similar financial problems and solutions?

After a tough financial stretch, people are just as likely to be looking for secured credit cards in Canada as they are here in the US. Canada has similar bankruptcy laws to those of the US and the same credit bureaus monitor a person’s management of their debts. That being the case, a secured credit card in Canada will be just as useful for improving credit rating up there as down here.

Here is a short list of companies in Canada that provide secured credit cards:

1. Capital One Bank

The capital one website doesn’t say much about its terms other than the fact that your credit limit will be determined based on your credit score. No mention of interest paid on the security deposit, so I doubt they pay any.

2.CIBC

CIBC seems to offer similar terms as the others with one exception. They only let you apply for a secured credit card at a local branch of the bank.
3. Home Trust Bank

Requires a minimum deposit of $1000, but can go up to $10,000. They pay no interest on your security deposit, and charge a $7.50 monthly fee. I looked over their terms and conditions and these guys seem a little steep on their fee structure.

4. Horizon Plus

This card requires a minimum deposit of $500 and pays 2% annually on that deposit. They also charge a monthly fee of $5.95 to keep your account open.

These companies will have a fairly simple application process and you’re highly likely to get approved. After all, why wouldn’t they approve you when they have your cash securing the line of credit they gave you? In fact, getting secured credit cards in Canada for people with bad credit is pretty easy. You can get a credit line of up to $10,000 (if you’re willing to put down a $10,000 deposit).

The game is the same in Canada as it is in the US – open a couple of secured credit cards, and put a balance on them every month. Make sure it’s an amount you can manage and pay off before the payment is due. The credit bureaus on both sides of the border need to see you use the credit card intelligently. That means no late payments! Don’t risk making your credit score even worse!

The Best Secured Credit Cards

It is difficult at times to find out what type of credit card is going to be good for you. If you have had problems with credit in the past then you are obviously trying to find the best secured credit cards or the best partially secured credit cards that will allow for you to build your credit back up, but at the same time they save you from the headache of having to deal with so many fees, high interest rates, and large requirements for deposits.

Many people ask are secured credit cards bad for your score? I don’t know the logic behind it because they are intended to do the opposite, but here are two possible ideas:

1. Most of the people that have bad credit scores are only able to get secured credit cards with high interest rates or a trade off of high fees. Then there must be an association between the two.

Well this is silly because really a secured credit card is like a bicycle with training wheels that will allow for credit holders to build a great deal of trust with credit bureaus. It is like grown up timeout. I think that most people get scared because these cards represent failure of some kind, but bad things do happen to good people. There is a better chance to repair your credit with the best secured credit cards and the best partially secured credit cards.

2. There are so many scams out there in the world today. I am afraid that of a bad credit card company that requires me to call a “900” number and then charges me an arm and a leg for even having the card.

There is some truth to this. There are certain card issuers out there that don’t report to credit bureaus and this will create no credit and keep you static. This isn’t what you want because your application fees, deposits, or possibly high interest rates are not worth it because you are not able to redeem yourself with the watching eye of the credit bureau big brothers. Make sure that your company is reporting to the credit bureaus. You can contact credit bureaus personally to find this out or just the Better Business Bureau to make sure that they are on the up and up.

Now understand that you will probably have to make some level of a deposit (around 100% of the credit you are looking to have available) and be ready for application fees or a trade off of a high APR. You probably want to try to avoid application and processing fees, which are cute ways to make more money off of the little guy, and go for a large respected bank like Bank One or Bank of America and get a small annual fee with decent interest rates. Honestly the best secured credit cards are the ones that you pay off on a regular basis and avoid maxing out.

How to Find a Visa Secured Credit Cards Online Application

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One of the best things you can do is try to buy a Visa credit card online. That might sound silly with the thought of scam, but there are plenty of options out there and it gives you a good opportunity to compare between what different companies will offer you. This is the only way to know how to find the right card and what really a good interest rate is, or who reports to the credit bureaus and who doesn’t, not to mention application fees and required limits for deposits for Visa Secured Credit Cards.

I think that one of the best things you can do is look for a Visa when you are starting out. Then tend to have the most offers for people out there with struggling credit and possibly they are the most respected credit issuer out there. I tend to see many offers for people with bad credit to either get Visa or MasterCard. Often these cards are the most general. A Discover tends to be more niche market, and American Express is looked at with a little more class. When you get an American Express it is usually unsecured and with larger limits.

Now you are probably going to have interest rates around 20% and that is probably going to be standard for someone with bad credit for a while until they can turn their credit around. As time goes on and you are able to get it unsecured then you can probably lower it to around 10%. I think even if that is the case, you should still try to limit your spending and keep your payments consistent. This will start to prove you have a good track record with Visa and Credit Bureaus.

Be careful when you find a Visa Secured Credit Card online application because you will probably have a link to be able to find out more information about the credit card terms. A low APR can be deceiving because it can quickly double or triple and sometimes the APR only lasts for a few months and might jump quickly for whatever clause in the contract. Understand that applying for a Visa Secured Credit Card Online will require several annual fees with lower interest rates, along with strict penalties and deposits. In other words set up an auto payment program so that you automatically pay these cards off as soon as possible each month.

I figure one of the best things you can do is shop around and be willing to call up the customer service numbers to fully understand what your capabilities are with the card. If they don’t have the 1-800 number listed then you probably don’t want to do business with them. There should be plenty of customer assistance and that will pay out with any standard issues you may have with the card or account through your stay with credit card issuers. So to sum up my thoughts, do your diligent homework and protect your credit and bank account.