If you plan to apply for a secured credit card, you need to know what to expect and be ready to avoid disappointments. While anyone can easily get a secured credit card with or without bad credit, there are certain things that you need to know. Listed below are some tips to keep in mind in your search:
Be prepared to submit a security deposit. The cost may range anywhere from $200 to $500 depending on your chosen credit card. The amount of security deposit is also a big factor to the credit line you will get. Some issuers will match your deposit while others may offer to offer a slightly higher or lower credit limit than the value of your cash deposit.
Make sure it’s a reputable issuer. Watch out for fly by night companies that offer secured credit cards. Quick, easy secured credit card offers abound especially online. Remember that not all offers are legitimate. Be diligent in doing research.
Get to know your personal credit standing. Despite the fact that you can get approve regardless of your credit score, it’s important to know exactly where you stand. For one, your rate of interest will largely depend on your credit rating. It’s a good idea to order your report prior to submitting application to make sure that it contains no errors which can pull down your score.
Set up automatic payment. Consider arranging automatic payment with your bank to ensure that you will not be late with your payments. This is particularly important since your goal is to raise your credit score.
Ensure credit reporting provision. Some credit cards may not offer this provision despite being advertised as secured. See to it that your payments will be reported accurately to major credit reporting agencies (Experian, Equifax, TransUnion) as it is the only way to prove that you can handle credit.
Compare secured credit cards. The rates and fees vary from one secured credit card to another. Although all secured credit cards may offer guaranteed approval, you want to make sure that your chosen card will not impose hidden fees, unreasonably high rates or unfair conditions.
About the Author
Tara Tiemann is a credit analyst for Go-prepaid.com which has been a resource site for people who want to live debt free. If you are on a budget using prepaid debit cards, prepaid credit cards and prepaid cell phone service can save you big money!