Secured Credit Card Offers

By: Anne Durrell

When banks advertise secured credit card offers, they're often referring to the type of credit card that anyone can apply for. If you have poor credit or even if you have no credit at all, then you can easily apply for one of these secured credit card offers.

What Are Secured Credit Card Offers?

In general, most secured credit card offers refer to those accounts where your own deposited money forms the security for the amount of credit given. In effect, this is just a fancy name for a prepaid credit card.

For example: If you accept one of the bank's secured credit card offers, then you deposit an amount of money as a cash collateral which then becomes your available credit limit. So if you deposit $500 then you have $500 to use as your credit limit.

The biggest difference between secured credit card offers and prepaid credit cards is that once you've spent your initial deposit on a secured card and shown a good repayment history, the bank may choose to reward you by increasing the amount available on your credit line without asking you to add any more of your own money.

What Fees Come with Secured Credit Card Offers?

Different lending institutions will charge varying fees and charges on secured accounts. It's important to compare several offers from different banks to be sure you're not paying more fees than you need to.

If you can, try to find an account that doesn't charge you an application fee. Many will also charge an annual fee, so be sure the one you choose isn't outrageously high.

How Do You Find Secured Credit Card Offers?

Not all banks or credit unions offer secured credit card offers. You might find that some banks reserve the secured cards for customers who are trying to establish new credit only. Other lenders will be happy to offer these cards to people with poor credit. It will pay to shop around to find the one you want to suit your own purposes.

Will Secured Credit Card Offers Help My Credit Rating?

The biggest benefit of secured cards over prepaid cards is the fact that lenders must report your payment history to the three credit reporting bureaus. If you have a low credit score or are new to credit, then applying for a secured account and then making sure you keep up with the repayments can really help to increase your credit score and build credit quickly.

Are All Secured Credit Card Offers Good for Long Term Use?

It's important to remember that secured accounts charge annual fees and usually come with higher-than-normal interest rates. While it's true that you will be paid a small amount of interest on your initial deposit, secured accounts should be viewed as short-term credit solutions. Use them to rebuild credit and establish a relationship with your lender. Then pay it off and open an unsecured card account when you're able.

Secured Credit Card Offers

unsecured credit card offers

Secured Credit Card Offers

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