What Do You Mean By A Secured Credit Card?

Secured credit cards are another very popular breed of credit cards. Secured credit cards, as their name suggests, are secured. Well, they are secured for the credit card supplier, really. Secured credit cards necessitate you to open up an account with the credit card provider and keep some cash balance in that account. This cash balance Acts as a security for the provider of secured credit card. Your credit bounds is dependent on the amount you throw in the account that you have got started with the provider of secured credit card. This is generally between 50 to 100% of your account balance. So in that sense, secured credit cards are not really credit cards (since they don’t offer you any credit really). For this reason, the secured credit cards are sometimes also referred as debit entry cards.

Why is the conception of secured credit cards so important?

As we know, credit card debt is a raging problem which is caused by improper usage of credit cards. Such people end up spoiling their credit evaluation to an extent where they cannot get another unsecured credit card (that is what we name the commonly used credit cards). Even after they have got paid off their dues and cleared their debt, their credit evaluation still stalks them. For such as people, secured credit cards are a boon. Secured credit cards present them with an chance to not only get a credit card in the first topographic point but also to better their credit evaluation by using the secured credit card in a under control manner (paying their dues in time, controlled spending, utilizing a upper bounds of 70% credit limit etc etc). As they go on with these good habits, their credit evaluation gradually betters over a clip period of time. Hence secured credit cards supply them with the agency of rectifying their errors (credit rating).

It’s not just the people with bad credit evaluation who travel for secured credit cards. Some people travel for secured credit cards because they don’t desire to trouble oneself themselves with the measures etc for credit cards. They don’t similar to even fill-up application word forms for unsecured credit cards.

Then there are some who just don’t like to borrow money (even if it intends borrowing from a credit card provider by using their credit card). However, such as people are very rare to find.

Some people just travel for secured credit cards because they have got heard a batch of atrocious narratives on credit card debt – maybe person from their household or one of their friends was devastated by credit card debt and they don’t desire to reiterate the mistake. So they make up one's mind to travel for a secured credit card.

Whatever be the ground for going for it, the secured credit cards are surely popular too.