Secured Consumer Credit Cards–Uses And Benefits For Cardholders In Various Credit Positions

Secured credit cards have often been used by consumers who may be looking to repair a bad credit score, but cardholders in various credit positions are able to access these lines of credit as a way to benefit their financial life in ways that go beyond bad credit repair. Obviously, like traditional, unsecured credit cards, a secured credit card will require responsible use on the part of the cardholder and timely repayments so that the history this card builds will reflect positively on the cardholder’s credit score, but this is true for either bad credit borrowers or someone who may simply be using this card to establish their credit score.

Typically, secured credit cards can be accessed by bad credit borrowers as a way to build a better credit history, but they can also be a more affordable option for simple, everyday credit card use. Yet, traditional cards available for individuals who are in a bad credit position will, obviously, range in interest and according to Bankrate.com, some of these cards may offer an APR as low as 7.9% or as high as 29.99%, if not more. The interest rate that a bad credit borrower can get on one of these cards will obviously depend on their past credit history and current financial position, but secured cards have been one way that affordability can be gained for credit card seekers.

While there are numerous credit card offers for secured cards, these cards will require a deposit of a sum of money into a bank account, which protects the lender and could offer a more affordable rate for the cardholder. Yet, for individuals who are simply looking to establish their credit, there are also some secured credit card basics that consumers should know, before they make a decision on their card. Other than depositing money into an account, consumers are often told to make sure that their card issuer will report their credit activity to the big three credit bureaus, consumers should also look for the most affordable interest rate on a card without sacrificing the lender’s reputability, meaning getting a low interest credit card from a financial institution that may charge excessive fees is to be avoided at all costs, but also, simply using this card properly is beneficial for a cardholder no matter their purposes and uses for their secured card.

While many consumers still associate a secured credit card as simply a credit card that bad credit borrowers can use, it’s greatly beneficial for not only restoring one’s credit history and a positive credit score, but it is helpful in simply establishing a credit history for those who may be young and early in their credit life. As an example, some college students may benefit from a secured credit card as this can not only offer them access to funds which can be used to make purchases, but with proper use and repayment techniques, this can also be one way that students begin the process of establishing a positive credit history.

Also, some consumers have simply had little credit history as they began their career or started off their financial life, so secured credit cards can offer affordable options for consumers who may be at almost any point in life and have not established a great deal of credit history. Typically, financial institutions will offer unsecured lines of credit to consumers who show they can use a secured credit card properly, and again, this can be another method for both establishing one’s credit history further or continuing the repair process. While, again, there are traditional options for bad credit credit cards, secured cards can offer more affordability and a more manageable line of credit which can be used by the cardholder to develop more responsible and beneficial credit spending and repayment habits that will be advantageous throughout their life.