Explore the best secured credit cards for building credit
Secured credit cards for building credit offer a quick and easy tool to establish a credit history or repair your credit and some even come with cash back rewards. Best of all, you determine your credit limit with a security deposit held at an FDIC-insured bank.
A secured credit card is a major credit card that requires a cash deposit to secure the credit line for that account. If you deposit $500 in the FDIC-insured account; you can charge up to $500.
The deposit also acts as a guarantee the credit card issuer will be protected if you are unable to make your payments. With some secured credit cards you can qualify with no credit check.
There are several types of secured credit but secured credit cards are a perfect solution for people who are unable to qualify for unsecured credit cards.
Secured credit cards can have several benefits for people who are looking to establish or rebuild their credit. Some of the key benefits include:
Secured credit cards must be managed the same as unsecured credit cards. Just because you have secured the credit card with a deposit, does not mean you can skip payments or make late payments. Late payments on a secured credit card will have the same negative effect as regular, unsecured credit cards.
Top 3 Management Tips for Secured Cards:
Making timely payments on several secured credit cards along with keeping account balances low will quickly raise your credit scores. Here is what you can do:
By simply adding new revolving credit your credit scores will get an immediate bump up. Having several revolving lines of credit such as secured credit cards is going to allow you to raise your credit scores quickly.
Secured cards for bad credit are a convenient, easy way to rebuild credit. Don't think avoiding credit cards is the best thing to do when you want to rebuild credit. Consider using secured credit cards as long as you are ready to:
Whether you’re just starting out with little to no credit or need to re-establish a good credit history, secured cards offer a simple and fast way to build good credit.
Good credit is as necessary for a healthy financial outlook as is saving money. There are some things most people cannot do without a credit history, such as finance a home, car or pay a large tuition bill. Major purchases more than likely require a good credit history. Even emergencies like auto repair, medical expenses, home repair or even relocation can require you have a solid credit history.
Adding good credit to a limited credit file or credit file with negative information is an excellent way to make yourself more favorable to banks and lenders.
Once you get credit it may take up to 6 months of on-time payments to establish a credit score if you currently do not have one. If your credit score needs a boost 6 months of on-time payments will help to improve scores.
Maintain low balances in order to see the most improvement in scores and never max out your credit cards. The best measurement of how much to spend on a credit card is no more than 30% of your available credit limit.
You can’t go wrong if you practice keeping account balances to less than 30% of the credit limit. And, always make payments on time or pay in full each month if possible.
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