Rebuild Your Credit History With Secured Credit Cards
The card is kept as a savings account in a bank which is against a security deposit. One has to deposit a certain amount of fixed money in security, if he or she wants to apply for a credit card. This deposit will be adjusted if the person has any multiple defaults in paying the dues. This credit card has interest rates which are higher than others. It basically the past credit history and the amount which is deposited in the bank was which decides the credit limit. It can either be the percentage or anything more than the percentage of deposit made in the bank. All these will be specified in the agreement signed by the card holder at the time of opening the account with the bank.
The secured credit card holder is expected to make the payments regularly as the bank has the option of recovering the dues from their deposits held with them. The banks would recognize you as the positive card holder if you make payment regularly. Despite bank being looking after the security deposits, they would not debit the account for a few defaults occurred. The amount deposited is been used for payment of dues while one closes his account. A majority of people uses secured credit cards to build the credit history again.
Before making any decision for the secured credit card, the person has to do a complete research on the products available in the market, their existing rates and charges, etc. For the person who already has a good credit score may go to unsecured credit cards. The people who have a bad credit or no credit at all are the ones been mentioned for secured credit cards. The bank has the money deposited with them which ensures safety to the deposit. Some deposits earn interest from the bank if it is deposited for a minimum period of time. One need to check the details provided before opening an account.
Just like normal credit cards, the secured credit card also attracts charges like application fee, processing fee, late payment fee, annual fee, enquiry fee, etc. Before forming an association with the bank through agreement, one need to understand the terms and conditions as well. The secured credits are much wanted as it attracts the ATM transactions and fee for balancing the credit card of a bank. As the credit scores are sent to the credit bureaus, one need to rebuild the credit history through secured credit card.
Also gather more details on secured credit cards and secured credit cards to rebuild credit.
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