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Secured Credit Cards
Updated: April 10th, 2012 by Timothy James -- We will cover two important areas here. Firstly, how to choose the most suitable Secured Credit Card for your personal circumstances - and secondly, what the best card offers are for the current week. Read the guide then compare the cards! Alternatively, if you want search for other card types, you can do that here.
Read The Guide...
This guide will give you important information you should know before applying; such as:
What are secured credit cards.
When and who should use them.
Information about annual fees.
The top cards for this week.
Compare The Cards...
Looking for the best offers for secured credit cards?
>>
See them here
Recommended:
Most popular credit card in this category.
Secured Credit Cards - What are they?
Secured credit cards require you as a cardholder to deposit money into a dedicated account before the card can be used. This money is then used as a back-up payment option should you default on a payment or go over your agreed credit limit.
How do Secured Credit Cards work?
When your card application is approved and an agreed credit limit is set, an agreed deposit amount is put into an escrow account by you, the new card holder.
This amount can be anywhere between 10% and 100% of your agreed credit limit. So for example, a new secured credit card with a credit limit of $1000 will require an escrow deposit of between $100 and $1000 before the card becomes active. Your secured credit card can then be used as normal to purchase items.
If, at some point, you miss a monthly payment, the card issuer has the right to reclaim the missed payment amount from the escrow account. This missed payment is then recorded on your credit history. Should all of the money in the escrow account be used up to cover missing payments your credit card will become void and your account will be closed. So you have to be careful!
Are there any fees?
Some card issuers do charge with a monthly or annual fee to use this type of credit card and it is also worth noting that the interest rates on secured credit cards can be quite high too - so choose your card carefully.
Who would benefit from this type of credit card?
The fact that you have to put money into an escrow account before you can use your card only makes sense if you are using it with the primary goal of repairing your credit score otherwise you'd simply use the money to go and buy what you want and save on the interest and card usage charges.
So, people with a bad credit score and those that have no credit history at all could find this type of card beneficial. In simple terms it gives them a way to show they can use credit responsibly and make payments on time, thus building up better credit.
Secured credit cards, along with prepaid cards, are also a good option for youngsters, and especially if the money you use to fund the escrow comes from their college or inheritance fund..
The best Secured Credit Card offers for the current week...
Whilst other finance websites usually list vast numbers of available credit card offers on a single page, in our view, all that does is create confusion (and a lot of research work) for you, the consumer. We've done all that work for you.
The top cards in our opinion are each marked with 5 stars. Remember, credit card companies change their offers all the time and the below information is correct at the time of writing. Be sure to double check the terms of the offer on the provider's website before completing an application.
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