How Secured Credit Cards Can Help Damaged Credit Score
6 Aug
We have a strong love-hate relationship with our credit cards. Sometimes they are our knights in shining armor, bravely coming to our aid in an emergency. Other times, it is a demon that has brought us financial problems much more serious than we ever imagine. Following the mortgage meltdown a few years ago, many people find themselves unable to live without debt, especially credit cards and others find themselves unable to make payment on time.
Although we all want a card that offers low interest rates, no annual fee and no down payment, this is not an option that you can always get. If your financial situation has taken a downward turn during this economic crisis, applying for a secured credit card is an option worth considering. It is, therefore, important to know the advantages and disadvantages of a secured credit card. Credit cards are also a good option for those who haven’t yet established credit record.
What make a secured card different from a credit card?
The name tells the obvious. Your credit card is secured against your assets. The card company secures credit card when the applicant is considered as “high risk”. To get a secured credit card, you must make down payment that is equal to or below your credit limit.
Credit cards may be good to those who don’t have perfect credit, including:
• Those who have damaged credit
• Those who have no credit
• Those who have filed for bankruptcy
What are the costs you can expect from a credit card?
• You should expect higher interest rate than usual; it may reach 20% or more.
• You should expect an annual fee; usually about $ 50 or more.
Typically, secured credit card is something we should avoid. However, if you’re in one of those who are in an unfortunate situation, it is really helpful to know that there are credit cards which will help you repair your damaged credit score.
Now you have a game to play and your goal is to regain a good credit score. If you can play the game right, it would be relatively easy to rebuild your financial status.
1. Apply for a secured credit
2. Make sure you make the payments one week before the due date.
3. Do not exceed the limit.
This card is not for everyone, but if you want to make everything straight and slowly rebuild your credit rating, it is one of your best paths to improve your financial situation.
