Secured Credit Card

Have you missed a lot of credit card payments? Tired of the finance charges, the collection calls and the feeling of frustration? Do you need to build your credit rating?

There is a credit card option available to you – the secured credit card. To obtain a secured credit card an applicant must provide a deposit to the credit card company at the time of application. This deposit is held on credit in case of delinquency in payments. The deposit may be used up after only one or two missed payments, or the credit company may be lenient and wait until up to 5 payments have been missed before applying the credit balance against the account. Secured credit cards can often be converted to regular credit lines when the card holder proves stability and responsibility in making timely payments over a long interval.

Secured credit cards aren’t a pure positive though. There are several potential drawbacks including:

• high application fees
• high annual fees
• extra processing fees
• no interest accruing on the held deposit
• required deposit in excess of the actual credit limit

If you are considering a secured credit card be sure to evaluate the pros and cons, and carefully investigate the fees and details associated with the particular card you are applying for. It might be the perfect solution for you, but it is always wise to read the fine print on the contract.