Secured credit cards are a great way to start building your credit. They are also a great way to rebuild your credit if you have recently filed for bankruptcy. A secured credit card is a charge card that is protected by some sort of asset. These assets can include money that is withheld as security by the bank offering the secured credit card.
In many cases you can lock up a certain amount of money in a bank CD and then request a secured credit card. This gives the banks the security that they need and gives you a chance to start building your credit score. There are many different benefits that are associated with secured credit cards. Here are some of the things that you should consider before you decide to get one.
Different Types of Secured Credit Cards
There are many different types of secured credit cards. You can start building your credit with a secured gas card. These are some of the best secured credit cards to get. A gas card can be an outstanding way to start building up your credit. In many cases, gas cards have lower set criteria to help you get accepted. In most cases, after six months, you can request your card to be unsecured.
Rebuilding Your Credit
Retail store secured credit cards are another great way to start building a credit. These secured cards can help you purchase the items that you need. Stores like Wal-Mart and Target offer a wide variety of secured credit card options. The stores are some of the best places to get a secured card. These large chain stores sell all the items or goods that you need to live every day. This helps you spend the money purchasing items that you need. In most cases these secured credit cards can convert to a regular or unsecured credit card after 12 months of on time payments.
Bank Secured Credit Cards
Bank secured credit cards can also be very beneficial if you know what you’re doing. In many cases you can lock up a certain amount of money in a bank CD. You are higher interest rates on a bank CD then you would a regular savings account. The bank will issue you a secured credit card that will be guaranteed by the bank CD. As long as you make your payments on time you will accrue interest from the CD that you have opened. This gives you two items on your credit report which can help you build up your credit much faster. This is also a great way to reduce the interest rate that you pay on the secured credit card payments that you make. As you pay interest on the payments of the purchases that you make you will be receiving interest from the CD that you a closed. After a one-year period of time the bank secured credit card can be converted to unsecured credit card.
Getting accepted for credit cards used to be very easy. Since the economic downturn banks have made much harder to receive credit. A secured credit card can be the best way to start building your credit score or rebuild from a recent bankruptcy. These are some of the best secured credit card options that you have available to you and you should consider which one’s fits your personal needs.