Many cardholders have been facing a situation where they need to rebuild a bad credit history, simply begin building a credit history, or are in need of ways to combat a bad credit score. Repairing a bad credit score requires building a better credit history, but for some cardholders this can be difficult due to a variety of factors like high interest rates on unsecured cards or the inability to obtain an affordable credit card which could help in the credit history building process.
In situations such as this, cardholders often turn to secured credit cards as a way to repair a bad credit score by rebuilding their credit history. Many of the nation’s top financial institutions, like Bank of America, Chase, Capital One, Citigroup, and Wells Fargo/Wachovia offer affordable secured credit card options. It’s often advised that individuals who are looking for secured credit cards seek out a card from a reliable lender, as there are some secured credit card lenders who simply look to take advantage of cardholders in a difficult situation concerning their credit.
Secured credit cards require the deposit of a sum of money into a bank account which secures the lender against loss if the cardholder defaults or simply misses payments. While this often requires a cardholder to be serious about repairing their bad credit score and building a better credit history since they will lose money if they are slack on their credit card repayment obligations, secured credit cards are no guarantee to a better credit score.
Again, selecting a reputable lender that will report secured credit card activity to the big three credit bureaus will be necessary, but without smart financial practices, secured card holders will not see any benefits from their secured credit card use. Only by making smart purchases, which are affordable for the cardholder and can be promptly paid off from month to month, have individuals successfully rebuilt a bad credit score with the use of secured credit cards.
Bad credit can result from a variety of factors and situations, but in cases where poor financial habits have been practiced, a secured credit card has not been the magic fix for bad credit borrowers. Yet, secured credit cards have been a valuable asset for individuals in the past who were attempting to build a better credit history and repair a bad credit score. Again, there is no quick fix to a bad credit score, but secured credit cards can help almost any cardholder set themselves on a path which will allow them to build a better credit history and gain a higher credit score.