Everything You Ever Wanted To Know About Secured Credit Cards

Secured credit cards are some of the most misunderstood financial tools of our time. While many people think secured cloned credit cards for sale are “less” of a credit card than unsecured credit cards are, this couldn’t be further from the truth. If you want to know the cold, hard facts about the world of secured credit cards, we have some information you need to read.

If you think you’ll be stigmatized each time you pull out your secured credit card from your wallet, you’re being just a bit paranoid. When you use secured credit cards, the only people who know that the card is secured is you and the bank. The people who swipe your card won’t even realize that you’re using a secured credit card.

While it’s true that some people open up secured credit card accounts with a deposit of more than one-thousand dollars, the fact is that you can get a secured credit card with a deposit of just a few hundred dollars to start. If you eventually want your credit limit to increase and you aren’t yet ready for an unsecured line of credit, you can usually add money to your deposit amount in future installments. Some people mistakenly believe that the companies that offer secured credit cards don’t report account activity to the credit bureaus. This definitely is not the case. Your secured credit cards will appear on your credit report, as will your payment history.

People who think secured credit cards aren’t reported are usually confusing secured credit cards with prepaid credit cards. Prepaid credit cards are not reported to the bureaus. With a prepaid credit card, you put money on the card and when you use it, you use it. There is no revolving line of credit. This is very different than how secured credit cards work. With secured credit cards, you put money into a savings account that acts as a guarantee for the revolving line of credit you are being issued. Each month you are billed for the purchases you made to the card and you must make minimum monthly payments, just as with an unsecured credit card account.

Some people think that secured credit cards offer much lower interest rates because the account is guaranteed by a bank account. This isn’t necessarily true. With secured credit cards, the interest rates are usually in the same ballpark as they are with unsecured credit cards (10 to 20 percent, depending on the card). While it’d be nice to think that all secured credit cards are intended for the good of those who need them, that just isn’t the case. When applying for a secured credit card, make sure you only deal with reputable companies.

If a company charges extremely high interest rates (more than 18 or 19 percent) or an application or processing fee, then take your business elsewhere. You should never pay more than you have to and there are many secured credit cards that won’t abuse you with these unreasonable terms. If you’re one of the many who believe that secured credit cards never have rewards programs or perks, you’ll be happy to find out that isn’t the case. There are some secured credit cards that do indeed offer rewards programs, although you may need to pay a minimal annual fee to enroll.