Secured Credit Cards? Why bother with them?

Trying to recover from serious credit problems?  Maybe you’ve never had any type of credit and need to build some fast?  

If you’re in either of these situations, chances are you’re having a hard time getting approved for a conventional credit card, and if no one will extend credit to you, how are you supposed to ever prove that you can handle it responsibly?  It’s like a merry go round that you can’t get off of… you keep trying to get a credit card to rebuild your credit, but no one will give you credit.  It can be very frustrating!  But, there is a way to get an actual credit card and get started on the path to better credit.  And it’s not nearly as difficult as you might think.

A secured credit card is exactly like a regular credit card with one fundamental difference:  Secured credit cards are literally secured by a deposit that you make when you open the account, whereas with an unsecured credit card, no deposit is required up front.

That’s literally the only real difference between the two, but trust me, getting a secured credit card can be one of the best moves you can make if you need to build (or rebuild) your credit history.  Why?  Because most secured credit card providers report both your available credit (which is normally determined by the amount of money you deposit up front) and your responsible use (good payment history, credit utilization, etc.) to the three credit bureaus on a monthly basis, so in just a few short months, you can go from having no available credit to having whatever amount that you choose when you make your security deposit.  You can even increase your available credit simply by depositing more money…there are even secured credit cards available that will eventually convert to conventional credit cards.

All you have to do is sign up for the card, make the initial security deposit, and then demonstrate your credit worthiness by keeping your credit utilization at or below the 30% threshold and making your payments on time every time.

It takes time, but in the end, you’ll find yourself on the road to better credit!

Use Your Tax Refund to Get a Fresh Start!

Want to get a fresh start on your credit this year?  Got a little extra left over from your tax refund?  Why not take just a little bit of your refund and use it to get your credit back on track?  Believe it or not, it doesn’t cost a small fortune to start rebuilding your credit and, even better, it’s not nearly as hard as you think.

And, as if that’s not enough – here’s the real reason you want a secured credit card:

Most secured credit card companies report to major credit bureaus and that is what really matters when it comes to getting a fresh start on your credit… you’ll be building up your credit score while using your new credit card.  

And all it takes is just a small deposit on a secured credit card – so, go ahead, use just a little bit of this year’s tax refund to get a fresh start on your credit!  Trust me, it will be worth it in the long run. Here are a selection of secured credit cards available to you:



Get A Credit Card to help build Your Credit score

Have you had poor credit in the past? Made a few mistakes, wish you’d done things a bit differently?

Well, all is not lost — you can rebuild your credit just like you lost it. It’s simple, and if you’re disciplined, it’s quick and almost painless.

First, what is a Credit Card? The normal procedure is that you deposit an amount of money into a savings account which is in turn security for the Credit Card you apply for. Then, you can use the credit card just as though it were a “normal” (unsecured) card, and when you make your payments on time, you are building your new credit history. It’s a good idea to use this card for regular expenses that you’d normally pay cash for; then using that cash to pay the credit card bill. This shows the credit card issuer that you are responsible and can pay your bills on time. It obviously takes a bit of self-discipline to do this, however; if you’re not good with handling money that may present a problem for you. But practise, as in all things, makes perfect.

Generally, you will find there are application fees and other fees not usually associated with regular credit cards when you try to get a secured credit card.

Some secured credit card programs will allow you to deposit additional monies into your security savings account, thereby increasing your credit limit. Check before applying for a credit card on this. Again, read the fine print! It’s important.

Many institutions, after a period of having made all your payments on time, will release your security deposit to you, thus graduating your card to an unsecured status. Congratulations if this happens to you!

You can build your credit even faster by getting more than one secured card at a time; just make sure that you stagger your opening of these accounts by a month or so each, otherwise you may run the risk of being rejected, and thus harming your credit score again.

After you’ve established credit using a credit card, you will most likely start to notice the amount of low APR credit card deals being offered to you. Make sure you read the fine print, as always, and carefully choose which offers you sign up for.

Different banks and credit card companies have differing amounts that they are willing to allow you to secure; and they all have different procedures, get the one most suited to you.

About the Author: Peter Carville
“You can rebuild your credit just like you lost it. It’s simple, and if you’re disciplined, it’s quick and almost painless. ”

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Using Credit Cards After Bankruptcy

So you have filed all of your papers with a bankruptcy lawyer and learned that the bankruptcy will stay on your credit record for at least the next ten years and you are feeling a little depressed. Everything in your financial life has been affected including your chances in the near future of getting a mortgage or car with a low interest rate. What do you do now? As odd as it sounds to some people many banks and companies out there want to do business with you, which in turn can help you start your financial life over. Increasing your credit score is not always easy, it is going to take some planning, will power, and even a little hard work. The good news is that it can be done.

Credit cards may be what put you into bankruptcy in the first place, but now it is your chance to use them to help you rebuild your credit history. I have a close friend who in 2006 declared bankruptcy, but she has worked hard to build up her credit and now has a very good standing with all three of the credit bureaus. Amazingly enough her credit score last time I talked to her is averaging around 730 for Transunion, Equifax, and Experian, which she thought would never be possible this soon after filing. It is true that she will have the bankruptcy on her permanent record for many more years, but at least she has a chance to get a home, car, or other asset at a decent price sometime in the future.

Throughout this rebuilding process you will want to closely monitor the changes in your credit reports. Many times mistakes are recorded in your credit report, some experts cite studies that say as much as 48% of all credit reports have errors in them that hurt the credit worthiness of the borrower. One of the nice things about some of the laws that have been passed recently is that a free report is available from each of the three credit bureaus on a yearly basis. So make sure you use these free reports to monitor and keep tabs on how your rebuilding process is progressing.

Some Tools You Can Use to Boost Your Credit Score

1) Secured Credit Cards: The amazing thing about these little plastic rectangular items is that they are one of the easiest ways to obtain credit after a bankruptcy. With a secured credit card you basically put a certain amount of money you have towards the card balance, and that is the credit line you will receive. So if you deposit $200 with the bank or financial company on that card then you will have a $200.00 credit line, just like some credit cards you have used in the past. If you make your payments on time and spend responsibly eventually the end result will be a positive impact on your credit score. My friend looked at her credit report six months after getting one of these cards and her score had actually increased by 20 points. What is also nice about the secured credit card is that if you make your payments on time they might eventually switch you over to an unsecured credit card and increase your credit line.

2) Big Box Store Cards: From researching these I have discovered that Harlem Furniture, Lowe’s, Menards, etc. might be willing to give you one of their cards even after you have declared bankruptcy, but their cards will definitely have a high interest rate for you. If you buy an item from one of these big box stores you have chosen for their credit card just make sure you pay responsibly and on time. Keep in mind that the final goal here is to show to the credit bureaus and future companies that you can make payments on time and can be trusted with more and better cards.

3) Piggy Back on Someone’s Good Credit: What on earth do I mean by that? I will go back to my friend who is married to someone with amazing credit. Because her husband had a great credit score she was able to “piggy back” on his good credit. Which means she was able to become an authorized user on a couple of his cards. She doesn’t even need to make purchases using those cards, but the credit bureaus will report that she is in good standing. You don’t even have to use your significant other’s credit to help yours, it could be a good friend that trusts you and won’t mind adding you as an authorized user. At the end of the day there are many tools at your disposable to help you with your newly cleaned credit slate.

Make sure you check on your credit reports periodically and dispute any mistakes that are not supposed to be on there. Establishing your new credit score is in your hands and you are ultimately responsible for proving to the credit bureaus and any creditors that you have changed your ways. With some discipline and hard work you can come out on top again financially, many people have gone down this path before you, and you will soon be ready to join the ranks of credit worthy consumers where you belong.

To get more information on how to get credit cards with bad credit go to

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