Reap The Benefits Only A Secured Credit Card Can Offer
By Dave Robinson, Thu Dec 8th
If you looking start building credit for the first time, orrebuilding your credit after a bankruptcy or credit problems, asecured credit card can be a great way to start.
A secured credit card is basically the same as an unsecuredcredit card; it has the same features, flexibility and use.There is no print on the card that identifies it as a securedcard--that's just between the card holder and the issuer. Andjust like any other credit card, it's accepted at merchantsthroughout the world who accept credit cards.
To get a secured credit card, you must open a savings account ora CD account in your name. Next, you deposit a certain sum ofmoney into the account, which will serve as the collateral forthe card. For example, if you deposit $1000 into the bankaccount, then the credit limit on the card will be $1000. If youare ever in default with the card, the bank will have the rightto take the money from the savings or CD account to pay thebalance. The money you deposit will earn interest, but you willbe restricted from removing it from the account at any time. (Ofcourse, you cancel the card with no balance on it.) The securedcredit card bank will determine the amount of the depositsrequired to receive a secured credit card.
You will be responsible for paying the credit card bill everymonth, just like you would an unsecured card. Every time youmake a payment on time, it will show as a good mark on yourcredit report. But be fore warned! Every time you are late, thatwill show up, too! In addition, just like a regular credit card,you will pay fees and interest if the balance isn't paid in fulleach month.
Eventually, as you build a good credit history with the bank,they may increase your limit on the secured credit card or offeryou an unsecured card with a low credit limit. Either way, youare on your way to building a good credit rating, which willallow you to live your life with more flexibility.
Could you benefit from some good marks on your credit report? Ifso, you should check out what a secured credit card can do foryou!
About the author:
If you would like to get more credit information you can visitour website which contains many credit resources. http://www.my-credit-report.info This article is copyright2005, but can be freely reprinted, as long as no changes aremade, including hyperlinks.
