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!