Best Secured Credit Cards 2012


Best Credit Cards – Best Secured Credit Cards
Secured credit cards are becoming an increasingly popular credit card choice, especially among those who are looking to rebuild or improve their credit standing. Secured credit cards can be a way back for those who have suffered credit problems in the past and are looking to reestablish their credit worthiness.

How Secured Credit Cards Work

Secured credit cards are considered to be ‘secured’ because they present less of a risk to the card provider than a traditional credit card. The account holder is required to deposit a minimum amount of cash reserves into the credit card account. That initial deposit is the set limit for the credit card. If you deposit $300, your credit limit for the secured card is the same.

When you make a purchase on the secured credit card, the purchase amount is deducted from the deposit. The account holder has the financial obligation to repay the amount due before the end of the billing cycle to avoid fees and penalties, reestablishing the credit limit on the card.

Improve Credit Profiles

For consumers who have had credit issues in the past and are unable to get approved for a traditional credit card, a secured card is an option for rebuilding credit. Since most providers of secured credit cards report back to the credit reporting bureaus each month, an account that remains current can help boost consumer credit scores.

An additional benefit of the secured credit cards is that typically after six months to a year of on-time, regular payments, credit scores will improve enough to allow for a consumer’s approval for a traditional unsecured credit card.

For consumes who have a bad credit history, secured credit cards can be the ideal resource to get finances back on track. For consumers who have no credit history or one that is limited, a secured credit card can help build a good credit foundation.

Making the Right Choice

There are many provides of secured credit cards so it is essential for consumers to explore all their options by comparing several secured credit cards before signing up. One a secured credit card account has been establish, it will affect the consumer’s credit standing. If you get approved for a card you are not happy with, you can hurt your credit score by opening additional credit card accounts.

Be sure to review the terms and conditions of each card option you review. Make sure you understand the payment requirements and the penalties associated with the card. Once you have the account established, it is important to use the card wisely. Missing payments, overextending your credit limits, and defaulting on your secured credit card can all be detrimental to your credit standing.

Proper management of a secured credit card can be your resource for making a credit comeback so make payments on time each month and spend within your financial capabilities. Never use your secured credit card limits as an extension of your income. Making wise purchase decisions and maintaining a good budget can ensure that a secured credit card will benefit your credit worthiness and boost your credit score.

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