Secured Credit Cards

People who have never had credit or need to repair a poor credit history may not qualify for a regular credit card. For them, a secured credit card may be the only way to establish, or reestablish, credit.

If you need to build credit, here are the answers to the top 7 questions about secured credit cards.

  1. What is a Secured Card?

Secured credit card require a collateral deposit of cash that becomes your credit line on that account. For instance, if you put $1000 in the account, you can charge up to $1000. You might be able to add to the deposit and extend your credit, or often times your financial institution offers rewards for timely payments and increases your credit line without additional deposits.

  1. Where Can I Apply For A Secured Card?

Websites like provides a list of secured credit card companies. Your local credit union might also offer secured credit cards, so check with them first if you are already a member.

  1. What Type of Charges Can I Expect?

Because there are several secured credit card companies available. You need to do your research and select a card that best suites your needs. Often times you can find a card without an application fee and with lower annual rate and interest charges. Of course you’ll want to check any fine print and be mindful of any additional fees.

  1. Any Thing To Watch Out For?

Of course. As with anything, speak with each company you are considering to use. Verify their rates and identify how they will treat you. Inquire if they have any special deals that you may qualify for based on your current situation.

The Consumer Financial Protection Bureau reinforces regulations that protect consumers. Therefore these credit card issuers are prohibited from deceiving its users and must be clear about their terms and conditions.

Conduct extensive research before apply for any credit card and be mindful to their fees, interest rates, and their deposit requirements.

  1. Does Each Bank Offer Secured Cards?

Not all banks offered secured credit cards. In fact most offer unsecured cards with very low limits and at higher interest rates. These cards are reserved for new credit card users and people who are in the process of restoring their credit.

  1. How Long Before I Qualify for an Unsecured Card?

The average time is about 365 days. It is at the discretion of the credit card issuer, and based on your performance as a card user. Most clients are able to apply for an unsecured card within 12 months.

  1. How Can I Use a Secured Card to Improve My Credit Score?

Buy a few things and pay off the card every month. It is not recommended to carry a balance on secured cards.  Secured cards ensure that you don’t spend more money than what you can afford yet, it’s not wise to keep it longer than necessary.

These cards come with higher interest rates and annual fees than most, unsecured cards. After 12 months of responsibly using a secured card, upgrade, if necessary to an unsecured card.

Better Credit is here if you need to improve your credit scores. Contact us today and speak with our credit experts.