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| What Is A Secured Credit Card |
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| Written by Benjamin Wise |
| Wednesday, 03 September 2008 11:16 |
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You might have heard about secured credit cards and not known what they are. A secured credit card isn't technically a credit card. That's because credit means that the company issuing the card is extending you a short term loan on the assumption that you'll pay your bills on time. If you pay off your bills within a single billing cycle, no interest is paid, though annual card fees may apply. Credit cards will allow you to immediately buy things that might require a number of paychecks to afford if you chose to save up for them. Saving money for little things is a good idea. However, if your car's transmission fails or you decide to take a loved one on a big vacation, that could be a lot harder. Credit cards are also prestigious and incredibly convenient. Being able to whip out the 'plastic' and make the transaction happen is often required to look like you've got your act together without carrying mass cash. This is why so many people use them every day! However, if you've had some bad luck or made some purchases that were really too big to handle, you may no longer have the credit score to get a regular credit card. This is where a secured credit card comes in. Using a secured credit card gives you all the benefits of an ordinary credit card, without having to deal with the downsides of having bad credit. What happens is that you put money on the card in advance, giving yourself a spending limit. This prevents the overspending problems that may occur with conventional credit cards. This is also a great way to rebuild your credit if it's less than fantastic. Just make sure that the issuer of your card is providing reports to the major credit bureaus. While a secured credit card won't let you spend more than the cash you have on it, it still gives you all the convenience and other benefits of buying with plastic, plus allowing you to fix up your credit. If you're thinking about getting a secured credit card to help build your credit, make sure that on-time payments are reported to the appropriate credit bureaus. Companies that don't report this won't help your credit. However, if you're looking for convenience and some insurance against spending too much, just about any secured credit card will work. Look for one that requires as little as possible in fees and other charges. Kindly provided by MoneyHunter.org You are welcome to use this article on your own website, if you include the link just before this text. |
| Last Updated on Sunday, 07 September 2008 16:04 |
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