Things to keep in mind when applying for a secured credit card.
What Is The Cost Of a Secured Credit Card
These are usually higher than a conventional credit card. because a secured credit card can be considered to be a specialised credit card by several lenders it may be additional processing fee.
What Is the Deposit That You Need to Make For the Secured Credit Card
The deposit that you may have to make with the lender before you can get a secured credit card may depend on the information on your existing credit file.
Do You Meet the Eligibility Requirements for the Secured Credit Card
Even though you are making a secured deposit towards the credit limit of your credit card there may be other eligibility requirements in place. It is not always a slightly situation that you’ll get approved for a secured credit card.
How Is Your Deposit Used For Your Secured Credit Card Usage
A secured credit card is called secured because you are required to make security deposit before you can use the card. This means that you deposit an amount that is equal to or more than the credit limit on your card in an account beforehand. This deposit is used by the creditor to cover the money that you might spend on your credit card in case you do not pay the Bill. The difference is that while some creditor may withdraw the money from the deposit if your payment is late by 30 days others may wait for you to pay back balance of 5 to 6 months before using your security deposit to recover their money. This is
What Is the Credit Limit on Your Secured Credit Card
Some secured credit cards allow a credit limit equal and is to the security deposit whereas others will give you a credit limit between 50 to 75% of the security deposit.
What Is the Interest Rates and APR Being Charged on Your Secure Card
Secured credit cards typically have a higher annual percentage rates than a conventional credit card. In case you are planning to revolve your balance the APR on your secured credit card may be an important factor that you might need to consider.
Is Your Secured Credit Card Getting Reported to the Credit Bureaus and on Your Credit Report?
It is ideal if the secured credit card you use is reported to the credit bureau by the lender. This will help you build a positive credit history and even qualify for a conventional credit card after having used a secured credit card and building up a good credit rating for yourself. A conventional credit card is more sought after than a secured credit card it was it typically offers a lower rate of interest and has fewer restrictions in terms of credit limit as compared to a secured credit card. There are also other features such as cash back or rewards etc that are available on a conventional credit card and not on a secured one.