Posts tagged: partially_secured_credit_cards

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.

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.