Control your personal finance   free website content | contact | privacylink partners
Home » Credit cards
Money articles

» Personal finance
» Credit cards
» Saving money
» Debt elimination
» Budgeting
» Investing
» Business
» Real estate
» Making money
» Miscellaneous
» Career
» Loans
» Promote your business
» Insurance
» Bankruptcy

» Archive

What is a secured credit card?

By Jakob Jelling
www.cashbazar.com

A secured credit card is often a valuable resource for those individuals that are suffering from poor or no credit and are having trouble finding the right card. A secured credit card is one where an individual’s savings account acts as a sort of collateral for the issuer. The secured credit card is thus backed up by that savings account.

Most credit cards are unsecured, thus the issuer relies on checking applicants’ credit history and current income information to decide whether to extend them a line of credit or not. Thus people with good or excellent credit qualify easily for low interest rates. While there are cards especially targeted to individuals with poor or no credit history, they tend to have a higher interest rate.

A secured credit card may be the only option for some people with a poor credit history. Since the card is backed by a savings account, there is less risk for the issuer and it is easier to qualify for the card. A secured card has a maximum credit limit set equal to or as a percentage of the amount in the savings account. Before applying for a secured card, be sure to look at the minimum amount you must maintain in your account to be eligible for the card.

So what are the benefits of a secured credit card? Some benefits are similar to regular credit cards such as you do not have to carry cash around and can purchase items online and be able to pay in a convenient manner.

More specifically a secured credit card can help you improve your credit history. If you got a secured card because you were ineligible for an unsecured one, improving your credit history will be important. If you maintain a regular payment record, it will reflect positively on your credit report and improve your credit score. Some creditors however may disregard your secured credit card transactions on your credit report.

Not all things are rosy for a secured credit card. The obvious drawback is that you are limited to taking out money to the amount you have in the bank. Even though it is backed by a savings account, a secured credit card will often have a higher interest rate than an unsecured credit card.

Even though the secured credit card is backed by your bank account this does not mean that your balance will automatically be paid through your saved money. If you carry over a balance, an interest rate will be charged. The savings account is only used as a last resort. Therefore you can end up further ruining your credit even with a secured credit card if you are not careful.

About the author
Jakob Jelling is the founder of http://www.cashbazar.com. Visit his website for the latest on personal finance, debt elimination, budgeting, credit cards and real estate.

Search CashBazar

Google
 
Web www.cashbazar.com


Latest money articles

» Controlling the price changes in futures markets
The lock-limit is one way that the markets can be controlled.

» How much will price changes effect stock trading?
Price elasticity is an economics term that refers to the way that price changes of stock can affect the demand for that stock.

» Large volume trading in steps
Program trading is a term that is also used in at least two different (though similar) meanings.

» How many stock options are available?
Open interests are not a feature of all stock market trades. In fact, open interests are calculated based on options and futures trades.

» Protect your portfolio from large losses
If you are worried about the stock market, then you might want to consider portfolio insurances.

» Insure your investment without limiting returns
Are you looking for a way to trade on the stock market without having to deal with all of the risks?

» Regional funds explained
Increase your portfolio diversity with funds from other regions.

» What is a derivative?
Invest in commodities without buying the commodities themselves.

» What is an option?
An option is an agreement that a commodity or stock will be available for purchase at a set date.

» Should I always pay a commission when buying mutual funds
There are three main types of mutual funds when it comes to commissions.

» Find the lowest risk investment portfolio
If you're trying to find a good investment portfolio, then you may want to look at the Treynor measure.

» The difference between PAX World Funds and The World Funds
The first type is purchased through the company PAX, and these funds focus on socially responsible companies.

» The Alpha factor explained
A new method of differentiating between different investments.

» How good is your planned investment
A company prospectus is a legal document that has been filed by the company that you might be thinking about investing in.

» How do I find the best investment advisor?
If you're looking for the best investment advisor for you, you should make sure that you pay attention to the type of investments that that advisor usually recommends.

» How to find the best full-service stockbroker - ask questions
Before you decide who you should choose for your full-service stockbroker, make sure that this is the best option for you financially.

» Investing in commodities
Investing in commodities is not too hard to do - the real problem comes in when you are trying to decide which commodities you should invest in, and when it is better to buy or sell a particular product.

» Don't wait to get your retirement payments!
If you're looking for an annuity, there are a variety of different annuities to choose from.

» Multisector bond funds explained
If you are looking to invest in bonds, but you are not sure that you want to deal with making all of the purchases on your own, bond funds might be the right option for you.

» Private annuity explained
The biggest difference between a regular annuity and a private annuity is that private annuities take place between two individuals, instead of between an individual and an insurance company.

» Avoid estate taxes with a life insurance trust
If you're looking for another way to insure yourself with a life insurance policy that will avoid any taxes after your death, then you should look into getting a life insurance trust.

» What is a Section 1035 policy exchange?
Don't lose insurance money when you change policies.

» Who should consider annually renewable term life insurances?
If you're looking for a good insurance policy, then you should probably take a good look at your financial situation, and at what you can count on being your situation in the future.

» Death benefit only plan explained
If you need life insurance, but you are not able to afford the regular price for life insurance, then you might want to look into a death benefit only plan.

» How to save money on your homeowner's insurance
In the case of homeowner's insurance, the most common way to reduce the amount of money that you will be paying each month is to increase your deductible.


Make money online

Please visit Sitetube.com and learn how to profit from your website.