Secured
cards work the method normal credit cards do. However, there is one big
difference. You should make a deposit to get a secured card. That deposit
maintains the card issuer in case you do not make your payments — and makes it
easier for people with bad credit or a little credit history to get approved.
How Does The Security
Deposit Run?
Deposits on
secured credit cards logic are - You give a certain amount of money as
collateral, and the credit card issuer generally grants you a credit limit
equivalent to your deposit. For instance, if you make a 500 USD deposit, your
credit limit will also be 500 USD.
In the same
way, if you make on-time payments on your secured credit card, you will get
your deposit back when you shut or upgrade your account.
If you are
obtaining a credit card to fix your poor credit, select one that reports to all
3 bureaus, (credit bureaus). Not whole cards do. If your card provider does not
report, you will not increase your credit, no matter how heartily you make your
payments.
Explaining The
Application Process
Even though
you will put down a security deposit, you will not automatically be confirmed
for a secured card. You still should apply, and most of the time, the provider
will check your credit. Per credit check following from a credit, application
lowers your credit point a bit, so it is not a good opinion to apply for
numerous cards. If you have been rejected by some providers, find other
options. If you're a very low point, you might want to look for a card that
does not need a credit check at all — and there are some.
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