subject: Rebuild Your Credit History With Secured Credit Cards [print this page] Rebuild Your Credit History With Secured Credit Cards
The card which is issued against a security deposit has to be well kept in the form of a savings account in a particular bank. A person who want to apply for this credit card should deposit a fixed sum of money in security. The deposit will be managed in accordance with the amount of money he need to pay as his due. This credit card has interest rates which are higher than others. There are factors like the previous credit history and the amount deposited based on which the credit limit is decided. It can either be the percentage or anything more than the percentage of deposit made in the bank. All these will be specified in the agreement signed by the card holder at the time of opening the account with the bank.
The bank performs the task of deduction their dues with the deposits which they have made in the bank as they are expected to make payments periodically. A person will be recognized as a positive card holder if he makes a regular payment as most of the banks send reports to few credit bureaus. The bank would not debit the account for a couple of defaults made even if the security deposits are made in the bank. Generally the deposit amount will be adjusted for any dues at the time of closing the account. A majority of people uses secured credit cards to build the credit history again.
Before making any decision for the secured credit card, the person has to do a complete research on the products available in the market, their existing rates and charges, etc. One who possess a good credit score should go for unsecured credit cards. The secured ones are been set for people who have no credit or bad credit score. In a situation like this, one need not worry about the money deposited as it is with the bank. The bank could be expected to give interest to the card holder if he has maintained the deposit for a shorter period of time. Before the account is opened, the card holder needs to check this information.
The secured credit cards offers similar charges of an ordinary one like application, annual and enquiry fee. The card holder has to study and understand the terms and conditions clearly before signing the agreement with the bank. The secured credits are much wanted as it attracts the ATM transactions and fee for balancing the credit card of a bank. The secured credit card is been referred as the best way to bring up your credit score as the report regarding this will be sent to different credit bureaus.
