Should You Get a Secured Credit Card?

by Mack Bartlett

COMPLETE

When you get a credit card, it pretty much changes your whole life because it shows you how well you can manage the money you have, and even the money that you don’t have, but that you have to come up with eventually. Better yet, it determines how financially stable you will be in the future, because managing your credit card debt either wisely or unwisely can make or break how well off you are. So how exactly are you supposed to protect yourself from all the risk you are taking when you apply for a credit card? After all, a credit card is something most people really can’t live without in today’s world.

There are two types of credit cards to be considered when shopping for the right one: Secured or unsecured. Secured is basically one that you have to put money down on so that they can use that money if you do not make the monthly payment. An unsecured credit card goes completely on collateral, without any secure amount of money that ensures that you will pay it all back. Depending on who you are, what your spending habits are, and what type of credit history you have, you may be better off getting a secured credit card rather than an unsecured one. Here are a few things to know about secured credit cards that will allow you to know if you fall into that category.

The main thing you would need to ge a secured credit card for is if you have a bad credit history and need to repair it. Secured credit cards are a way to make punctual payments on a credit card and get rewarded for it by having your credit score go up, but this is only possible if your credit card company is willing to report your timely payments to the major credit bureaus. Make sure, when you get a secured credit card, that the company you are going with will report the payments you make on time, otherwise there is really no point in having a secured credit card.

A deposit is required for a secured credit card, as I said before. You must put a certain amount of money into a deposit where the credit card company has access to it, so that if you fail to make payments on more than one occasion, they can sometimes resort to getting it out of your deposit to ensure that it gets paid, one way or another. This is a bit more safe than an unsecured credit card, but with either one, making late payments will not improve, but hurt your credit score even more.

There are a few requirements that come with a secured credit card. These requirements can be things like your age, income, or whether or not you have some sort of bank account. Still, it is easier to get approved by a secured credit card than it is to get approved by an unsecured credit card.

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