Secured credit cards have often been used to rebuild a bad credit score by numerous consumers who may have not had access to unsecured credit which they could use to begin building a better credit history. Secured credit cards, or what many term “bad credit credit cards” are usually meant to be used by individuals who wish to establish a positive credit history or begin making purchases and repayments to reestablish a good credit score when a bad credit score may be present.
However, financial advisers often urge borrowers to do a great deal of research and compare both secured credit card offers and rates. Obviously, anyone who may be seeking a bad credit secured credit card as a way to rebuild a bad credit score will be in a better position to do so if they find the best card for their situation. There are numerous secured credit card offers from a wide variety of banks and credit unions, but not all of these cards may be beneficial for each bad credit borrower’s situation nor are they always from a reputable institution.
Cardholders will obviously have options from large financial institutions when it comes to secured credit cards, and these cards are usually a safe option since well-established financial institutions typically offer consumers peace of mind, in that they do not have to worry about being taken advantage of by a fraudulent lender. Also, many of these larger institutions or well-established banks and credit unions can simply show what fees and percentage rates will be offered up front, and cardholders do not have to worry about hidden fines or charges.
Yet, individuals who are seeking a secured credit card to rebuild a bad credit score may be able to find reputable card offers at a low interest rate if proper research is done. Usually, secured credit card seekers will be looking at a range for their annual percentage rate of around 12% to 20% or higher.
Obviously, one’s interest rate will depend on a variety of factors, like the credit card lender, the amount of collateral presented by the cardholder, and there may be some cases where a cardholder’s credit history and score may be taken into account as well. It goes without saying that most consumers who are seeking a secured credit card may not be in the best financial position, but affordability in a secured credit card is still something which should be sought out.
While many have used secured credit cards to reestablish their credit history, these types of cards are no guarantee and consumers must practice smart financial habits before any benefits can be seen. In the past, those who have used secured credit cards to their advantage or cardholders who have simply made smart, affordable purchases and budgeted in their personal financial life in a way that has allowed them to promptly pay off these charges, which has reflected well on their credit history and eventually began increasing their credit score.