Many of the nation’s top lenders, like Bank of America, Citigroup, J.P. Morgan Chase, Capital One, and Wells Fargo have been offering secured credit card opportunities for individuals who have a bad credit score but wish to rebuild their credit history and improve their credit standing. A secured credit card can be a way in which someone who has a bad credit score can gain access to credit with which they use to make charges and pay off these purchases so as to build a more positive credit history.
Secured credit cards are beneficial for building a credit score, as long as the lender will report to the big three credit bureaus, which is usually the case with many of the reputable lenders who offer this type of card. While some people may have an unsecured credit card, but have seen their credit score drop, secured credit cards may be a more affordable way to rebuild one’s bad credit score when it comes to interest. A lower interest rate on a card can make paying off charges easier, which again, can help when a cardholder is trying to build positive credit.
Lenders who offer secured credit cards will often require that a sum of money be deposited into a bank account to secure the card and if the cardholder fails to make payments or defaults on charges, the money in the account will be used so that the bank will not incur any loss. It’s for this reason that the amount of the deposit made will set the credit limit on the card.
Over the past months, many businesses and individuals have been using credit cards from top financial lenders so as to repair a bad credit score. A bad credit score has been the product of many individuals losing their job over the past months, living on credit, and being unable to meet certain payments as well. Some unemployed men and women have gone through a time of great financial difficulty, which has brought on a bad credit score, but the secured credit cards have been beneficial for rebuilding these men and women’s bad credit score.
While a secured credit card can be a valuable tool, it’s important to remember that one must get rid of their debt before they begin to repair their credit score. When someone is using a secured credit card to buy and pay off purchases, they are essentially adding to their overall debt, which is not an ideal situation for repairing a bad credit score. Yet, cardholders who are in the position to do so, may be able to use a secured credit card to their benefit, when they have overcome any debt that may have contributed to their bad credit score or are simply in a financial position to use a secured card to make purchases and pay them off.