Secured credit cards have been used by many individuals over the past months, and in years past, in order to build a better credit score. For many, the lack of a credit history has been problematic and, for someone who has no credit history or a poor credit score, obtaining credit can be difficult or may come with an unaffordable interest rate. Yet, there are many daily, online searches for secured credit card offers from banks like Wachovia, Wells Fargo, Citigroup, or Bank of America and, when it comes to finding a secured credit card a reputable lending institution is the best bet.
There are many secured credit card offers that can be found online, but some credit card companies may be unwilling to offer individuals who may have a bad credit score or no credit history an affordable card that will allow them to either establish their credit history or repair their credit score. There have been trouble for many over the past months, mostly related to financial problems from unemployment or simple poor spending habits, which have caused the credit scores of many to drop.
No matter if someone has either developed poor spending habits and gained a poor credit score over time or if financial and economic difficulties that were out of their control caused a drop in their credit score, everyone deserves a chance to rebuild their credit history and repair a bad credit score. It’s for this reason that reputable lenders like Citigroup, Bank of America, Wells Fargo/Wachovia offer these types of cards. While secured credit cards are not limited to just these financial institutions, it’s important for someone who is researching secured credit cards to look at a variety of offers and make sure they find an interest rate, an agreement plan, and a lender who will not try to hinder the rebuilding of their bad credit score.
Secured credit cards often require the deposit of a sum of money into a bank account, which secures the credit card, so this is something that needs to be factored into the equation of an individual who may be attempting to acquire a secured card. This bank account sets the credit limit and secures the bank from loss if a bad credit borrower happens to miss payments or defaults. While a secured credit card can be a beneficial tool in helping someone repair a bad credit history or simply build a credit score, it will not guarantee good credit.
Smart financial practices will be required for this card to be useful and, when shopping for a secured credit card it will be important to work with a lender who reports to the big three credit bureaus so that card activity can benefit the cardholder. Again, while many have been using secured credit cards to repair a bad credit score or build a credit history, spending within one’s financial means to repay and promptly paying off charges so that debt does not get out of control will be just a few of the financial practices that must be put into place if a cardholder is to repair a bad credit score or build a better credit history that will last for years.