Credit Cards Secured - The Dos and Don"ts
It is difficult not to use credit cards these days mainly because most merchants prefer cards as a method of payment.
They can be used to travel, for hotel reservations, to rent a car, etc.
However, people with bad credit history are having a tough time getting one, which is why secured credit cards are the best option for people with bad credit.
In a nutshell, secured card credit works like this: The cardholder will deposit a certain amount of money in his account.
The amount of money is will be the credit limit.
Once the cardholder is unable to pay his balance, the card company will use the deposited money as a security against default.
Once the cardholder is able to prove that he is able to manage his finances well and he pays on time for a certain period, usually 12 months, the limit will be increased and more money can be deposited on the account or the company can grant an extension to more credit without additional deposits.
Now, before you plan to get a credit cards secured, you need to have clear understanding of what you can do and what you cannot do with this type of card.
Here are the following secured credit cards do's and don'ts: Do: Compare several credit cards secured before you sign on.
The thing is, not all offers are the same, which is why it is best to do extensive research in order to determine which card offers the best deals.
Select a secured card credit that gives higher balance if it is necessary.
Determine if this type of card is really the best option for you.
If you think you qualify for a traditional card, then that might be there best option for you.
However, if you have bad credit in the past, then there is no other choice but to get a secured card credit.
Read the terms and conditions.
Of course, you need to look after your own interest and for this reason, you need to read and know everything before you sign on.
Reading the fine print will give you a clear idea on the terms as well as the various fees and charges that may apply once you start using the card.
Don't: Go back to old habits.
Know that this card is chance for people with bad payment history to re-establish themselves by building a better rating.
If you go back to your old habits of making late payments, there is no chance for you to get an increase on your balance and it would be impossible to obtain a loan in the future.
Exceed your limit because if you go beyond your credit line, you will pay extra charges.
Worse, you will get bad marks because every transaction you d will be recorded and re-assessed periodically in case you qualify for a balance increase or an upgraded account.
They can be used to travel, for hotel reservations, to rent a car, etc.
However, people with bad credit history are having a tough time getting one, which is why secured credit cards are the best option for people with bad credit.
In a nutshell, secured card credit works like this: The cardholder will deposit a certain amount of money in his account.
The amount of money is will be the credit limit.
Once the cardholder is unable to pay his balance, the card company will use the deposited money as a security against default.
Once the cardholder is able to prove that he is able to manage his finances well and he pays on time for a certain period, usually 12 months, the limit will be increased and more money can be deposited on the account or the company can grant an extension to more credit without additional deposits.
Now, before you plan to get a credit cards secured, you need to have clear understanding of what you can do and what you cannot do with this type of card.
Here are the following secured credit cards do's and don'ts: Do: Compare several credit cards secured before you sign on.
The thing is, not all offers are the same, which is why it is best to do extensive research in order to determine which card offers the best deals.
Select a secured card credit that gives higher balance if it is necessary.
Determine if this type of card is really the best option for you.
If you think you qualify for a traditional card, then that might be there best option for you.
However, if you have bad credit in the past, then there is no other choice but to get a secured card credit.
Read the terms and conditions.
Of course, you need to look after your own interest and for this reason, you need to read and know everything before you sign on.
Reading the fine print will give you a clear idea on the terms as well as the various fees and charges that may apply once you start using the card.
Don't: Go back to old habits.
Know that this card is chance for people with bad payment history to re-establish themselves by building a better rating.
If you go back to your old habits of making late payments, there is no chance for you to get an increase on your balance and it would be impossible to obtain a loan in the future.
Exceed your limit because if you go beyond your credit line, you will pay extra charges.
Worse, you will get bad marks because every transaction you d will be recorded and re-assessed periodically in case you qualify for a balance increase or an upgraded account.
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