secured credit card?
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secured credit card?

Question by babydoll: secured credit card?
What exactly is a secured credit card?

Best answer:

Answer by KyOOt T
Prepaid credit card. You have to deposit money first into the card before you use it.

What do you think? Answer below!

Comment (5)

  • Zappyzip - March 31, 2014

    one that no one knows about

  • Scotty Doesn't Know - March 31, 2014

    A secured credit card is a credit card issued by a bank in exchange for you putting up a savings account for “security.”

    In other words, you put up $ 300 in a savings account, and the bank will give you a credit card with $ 300-500 credit limit. As you develop a good payment history, the bank may at some point in the future let you have your security back, or they may increase your credit limit.

    Bank of America has a great Secured Credit Card program.

  • Mountain Top - March 31, 2014

    It is a credit card with a bank who takes a deposit (usually up to a maximum of $ 5000) which is placed in a savings account. This savings account is frozen as to your access to it because it guarantees repayment of the credit card, which then has an identical limit. Usually after one to two years, if your credit score improves, the savings account will be released, and the credit card will be exchanged for an unsecured card. The new unsecured card will be reported to the credit bureaus as if it had been started at the date of the original secured card – and will look good to the scoring systems.

    A secured card is reported as such to the credit bureaus and is scored differently than a pure unsecured card.

    The secured card program is an excellent way in which to rebuild a lot of credit fast if you have good income, and just had a hiccup in your credit.

  • Smoovy Loco - March 31, 2014

    A secured credit card works exactly like a regular credit card, the only difference is that a deposit is placed upfront that would be used as collateral for a credit limit in the same amount. The deposit would not be used to pay on the balance, you still would have to pay either the minimum balance, or the whole amount in full, on time every month. The deposit would only be used if the account became delinquent where it would be closed and then it would be used to pay the balance. A good advantage with secured credit cards is that the credit limit can be increased by adding to the deposit, and also the deposit gains interest while you’re building up credit. Usually it takes 9-18 months for the card to change over to a regular card, providing you’ve paid on time every month, and used the card lightly my making small purchases on the card. I’ve posted links to several secured credit card companies, including Bank of America which Scotty had mentioned. Citi also has a very good secured card where you can gain interest on a certificate of deposit at a very good rate.

  • twv2351265 - March 31, 2014

    Secured credit cards are a great way to rebuild your credit. Most secured credit card companies require a deposit equal to the credit line your are seeking. Make sure they report your payment monthly to the major credit bureaus. Making your payments on time monthly will increase your credit rating. You will also get you deposit returned to you after one year, turning your secured credit card into a unsecured credit card.